The Difference Between A Home’s Cost vs. Price

As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first time or repeat buyer, you must not be concerned only about price but also about the ‘long term cost’ of the home.

Let us explain.

There are many factors that influence the ‘cost’ of a home. Two of the major ones are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.

What will happen in 2015?

A nationwide panel of over one hundred economists, real estate experts and investment & market strategists project that home values will appreciate by almost 4% by the end of 2015.
Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30-year fixed mortgage rate will appreciate to 4.5% by the end of 2015.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

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Moving Across America [INFOGRAPHIC]

-Source KCM
-Next top Realtor/Real Estate Agent
-Next top San Fernando Valley Realtor

Consumer Confidence at Highest Level in Over a Decade

Two recently released reports reveal that the American public is starting to feel much better about the U.S. economy. The University of Michigan’s Surveys of Consumers showed that:

“Consumer optimism reached the highest level in the past decade in the January 2015 survey…Consumers judged prospects for the national economy as the best in a decade, with half of all consumers expecting the economic expansion will continue for another five years. The anticipated strength in the overall economy has been accompanied by more favorable income and employment expectations.”

Here is a chart showing results over the last decade:

As all consumers are feeling more optimistic, more young adults are moving out of their parents’ basements and into a residence of their own. The recent Census report shows that new household formations skyrocketed in 2014. Below is a chart showing the historical significance of the numbers:

Bottom Line

The economy is definitely improving and, more importantly, the American consumer is beginning to feel much more confident. This should lead to a very robust real estate market in 2015.

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Two recently released reports reveal that the American public is starting to feel much better about the U.S. economy. The University of Michigan’s Surveys of Consumers showed that:

“Consumer optimism reached the highest level in the past decade in the January 2015 survey…Consumers judged prospects for the national economy as the best in a decade, with half of all consumers expecting the economic expansion will continue for another five years. The anticipated strength in the overall economy has been accompanied by more favorable income and employment expectations.”

Here is a chart showing results over the last decade:

As all consumers are feeling more optimistic, more young adults are moving out of their parents’ basements and into a residence of their own. The recent Census report shows that new household formations skyrocketed in 2014. Below is a chart showing the historical significance of the numbers:

Bottom Line

The economy is definitely improving and, more importantly, the American consumer is beginning to feel much more confident. This should lead to a very robust real estate market in 2015.


-Source KCM
-Next Top Realtor/Real Estate Agent
-San Fernando Valley Realtor

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