Where Are Mortgage Rates Headed? This Fall? Next Year?


The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate the greater the payment will be. That is why it is important to look at where rates are headed when deciding to buy now or wait until next year.

Below is a chart created using Freddie Mac’s July 2015 U.S. Economic & Housing Marketing Outlook. As you can see interest rates are projected to increase steadily over the course of the next 12 months.



How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.

Dr. Frank Nothaft, the SVP & Chief Economist for CoreLogic, had this to say in their latest MarketPulse:

“If you are thinking of buying a home and have the financial means to do so, this could be a good time to take a look at the neighborhoods you are interested in. We expect home prices in our national index to be up about 4.3% in the next 12 months, and mortgage rates are also likely to increase over the next year.”

If both the predictions of home price and interest rate increases become reality, families would wind up paying considerably more for their next home.

Bottom Line

Even a small increase in interest rate can impact your family’s wealth.

Contact Jo Anne or Tony Rizza at 843-301-5825 to evaluate your ability to purchase your dream home. Great properties are available in the current Hilton Head Island/Bluffton real estate market, so be sure to call today!

Hilton Head Real Estate Partners
Partnering with you every step of the way.

Selling Your Home? Price It Right From the Start!



In today’s market, where demand is outpacing supply in many regions of the country, pricing a house is one of the biggest challenges real estate professionals face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.

There is no “later.”

Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes.

John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Price published in Real Estate Economics revealed:

“Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”

Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges.

Don’t build “negotiation room” into the price.

Many sellers say that they want to price their home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house.

Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it!

One great way to see this is with the chart below. The higher you price your home over its market value, the less potential buyers will actually see your home when searching.



A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house.

Look at it this way: if you only receive one offer, you are set up in an adversarial position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation?

The Price is Right

Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home.

Bottom Line:

You need an agent that will tell you what you need to know rather than what you want to hear. This will put you in the best possible position.

As your real estate partner we will walk through every step of the home buying and selling process. Give Jo Anne or Tony Rizza a call at 843-301-5825 for more information on the current Hilton Head Island/Bluffton real estate market.

Hilton Head Real Estate Partners
Partnering with you every step of the way.

This Is NOT Your Parents’ 3% Down Payment Plan


In their latest Housing Market Insight & Outlook report, Freddie Mac revealed that recent low down payment initiatives have raised concerns that we may be returning to the same lax mortgage qualifications that caused the housing crisis from which we are just now recovering.

The report went on to explain that today’s underwriting guidelines are nothing like those that existed just prior to the housing meltdown.

“Pre-crisis underwriting allowed layered risk, that is, the combination of multiple features that amplified credit risk. Low down payments often were combined with variable-payment loan structures, property-based underwriting, and questionable appraisals. These risk factors, along with the ‘irrational exuberance’ of some borrowers, led to large losses during the crisis.”

What is layered risk?

In the pre-crisis environment, many mortgage loans incorporated several additional features besides low down payments that multiplied the total risk of the loans such as: variable payment options, underwriting based on the property not the borrower, questionable appraisal processes. Borrower expectations were also overly optimistic at that time.

Freddie Mac highlights the difference between then and now by using a table in the report:



By removing the “layered risk”, we can be confident that low down payment programs will not impact the market the way mortgage underwriting impacted the market a decade ago. And the report explains:

“Previous research has found that reduced down payments can increase the relative probability of homeownership among some groups by over 25 percent.”

Bottom Line

We believe the report’s conclusion says it all:

“As long as the underwriting process bars the return of the layered risks prevalent in the pre-crisis era, lower down payments are not a cause for concern.”

Contact Jo Anne or Tony Rizza at 843-301-5825 for more information on the current Hilton Head Island/Bluffton real estate market.

Hilton Head Real Estate Partners
Partnering with you every step of the way.

The True Cost of Waiting…



First-time homebuyers are flocking to the housing market in greater numbers than any time in the last few years. Renters who are ready and willing to buy are now realizing that they are also able to as well. Many first-time buyers are Millennials (born between 1981 – 1997).

If you are one of the many in this generation who sees your friends and family diving head first into the real estate market, and wonder if now is the time for you to do the same, keep reading!

The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices and interest rates were to increase over a period of time.

Let’s look at an example of what the experts are predicting for the upcoming year, and what that really would mean for you. Let’s say you’re 30 and your dream house costs $250,000 today. Right now mortgage interest rates are at or about 4%.

Your monthly mortgage payment (principal & interest only) would be $1,193.54.

But you’re busy, you like your apartment, and moving is such a hassle. You decide to wait until next year to buy. CoreLogic predicts that home prices will appreciate by 5.1% in the next 12 months; this means that same house you loved now costs, $262,750.

Freddie Mac predicts that over this same period of time, interest rates will be a full point higher at 5.0%. Your new payment per month is now $1,410.50.

The difference in payment is $216.96 PER MONTH!

That’s basically like taking $8 and tossing it out the window EVERY DAY!

Or you could look at it this way:

  • That’s your morning coffee everyday on the way to work (average $2) with $10 left for lunch!
  • There goes Friday Sushi Night! ($50 x 4)
  • Stressed Out? How about a few deep tissue massages with tip!
  • Need a new car? You could get a brand new car for $217 a month.

Let’s look at that number annually! Over the course of your new mortgage at 5.0%, your annual additional cost would be $2,603.52!

Had your eye on a vacation in the Caribbean? How about a 2-week trip through Europe? Or maybe your new house could really use a deck for entertaining. We could come up with 100’s of ways to spend $2,603, and we’re sure you could too!

Over the course of your 30 year loan, now at age 61, hopefully you are ready to retire soon, you would have spent an additional $78,105.60, all because when you were 30 you thought moving in 2015 was such a hassle or loved your apartment too much to leave yet.

Or maybe there wasn’t an agent out there to educate you on the true cost of waiting a year. Maybe they thought you wouldn’t be ready. But if they showed you that you could save $78,000 you’d at least listen to what they had to say.

Bottom Line

They say hindsight is 20/20 and we’d like to think that 30 years from now when you are 60, looking back, you would say now was the time to buy!
Give Jo Anne or Tony Rizza a call today at 843-301-5825 for more information on the current Hilton Head/Bluffton housing market.

Hilton Head Real Estate Partners
Partnering with you every step of the way.


The Main Reason You Should Not Wait to Buy…


The Joint Center for Housing Studies at Harvard University recently released their 2015State of the Nation’s Housing report. The report concentrated on the challenges renters in this country are facing because of the diminishing supply of quality rental units and dramatically escalating rents.

However, there was also information buried within the report that revealed that now is definitely the time to buy your first home or move-up to the home of your family’s dreams. With home prices still below peak values and mortgage rates still near historic lows, the monthly mortgage payment on a median priced home is less than at almost any time in the last 25 years.

Here is a graph which helps visualize the data from the report:



Bottom Line

With home prices increasing and mortgage rates projected to increase, now is the time to buy.

Jo Anne or Tony Rizza are available at 843-301-5825 to provide more information on the current Hilton Head/Bluffton housing market.


Hilton Head Real Estate Partners
Partnering with you every step of the way.

Town of Bluffton MASC Achievement Award

Congratulations to the Town of Bluffton who has been recently awarded an Achievement Award by The Municipal Association of South Carolina (MASC) during its Annual Convention in Greenville. The MASC recognized the Town’s efforts in successfully implementing an affordable housing project within the historic district as it cleaned up blighted areas and helped diversify a community. Bluffton competed with other cities and towns statewide that have a population between 10,001 -20,000 people.


This award is a great achievement for the Bluffton area as it has experienced a huge growth rate of 1700% in the last twenty years! Hilton Head Real Estate Partners offers Real Estate Brokerage services in the surrounding Bluffton area. To find out more about buying or selling a house in Bluffton, call our specialist Jo Anne on 843-301-5825 or email joanne@hiltonheadrealestatepartners.com.


View the full report on YouTube here.

Hilton Head Real Estate Market is Sizzling

The S&P/Case-Shiller Home Price Index recently showed that home prices in 20 major metropolitan areas had increased at the strongest pace since the bubble years. At long last, major national indices are telling the story that local MLS data users have known for months or even years. Yes, the housing market is recovering.  The recovery varies by geography and market segment, but things are certainly better than they have been and are showing no signs of letting up.
According to the Hilton Head MLS, new listings in the Hilton Head region decreased 14.1 percent to 471. Pending Sales were down 1.4 percent to 349. Inventory levels shrank 15.5 percent to 2,602 units.  Prices turned higher. The Median Sales Price increased 25.2 percent to $263,000.  Days on Market was down 20.0 percent to 121 days. Absorption rates improved as Months Supply of Inventory was down 27.4 percent to 8.7 months.  In some Hilton Head Neighborhoods, consumers have 50 or 60 percent fewer options from which to choose than they did a few years ago. That’s causing bidding wars in popular areas. Despite the competitive landscape for buyers, housing remains one of the brightest lights in an otherwise subdued economic recovery.
If you are a serious buyer, then please visit our website www.hiltonheadrealestatepartners.com to search all available properties for sale on Hilton Head.  You will also find Bluffton homes for sale there too.

Winning The Multiple Offer Scenario

Let’s face it, it’s no secret the market is heating up again in Hilton Head Island and Bluffton SC. The year started with extremely low housing inventory and while inventory levels are up due to the season, overall there is more buyer demand for homes than there are homes available. It’s the law of supply and demand and when demand outweighs supply, scarcity is created and prices go up! That’s a stark contrast to the market we were in just a year and a half ago when supply outweighed demand.

For example, homes popping onto the market in Hilton Head Island and Bluffton, SC that are well-priced are quickly finding suitors in the form of multiple offers in in just a few days of being listed for sale. Often times, these properties are selling for more than asking price. It can be a very stressful and frustrating process for home buyers looking to purchase. So how can you set yourself apart and win that deal?

1. Pay cash. Cash is King! and there’s a good reason it is. Typically, an offer to purchase with cash has less chances for falling apart than one with financing so sellers prefer this method of payment.

2. Get pre-approved for a loan. If you can’t pay in cash then getting pre-approved for a loan is the next best thing. It is highly recommended you get pre-approved before you start house hunting because you don’t want to wait to get pre-approved after you find the house you want to make an offer on because offers that aren’t accompanied by pre-approval letters are usually discarded and it takes a little time to get one so you could miss out on that perfect house.

3. Offer more earnest money. Your typical buyers are offering $1,000 to 1% of the offer price. Set yourself apart by putting more skin in the game. Remember, your earnest money is protected provided you abide by the terms and conditions of the sales contract. If you breach contract then the seller will keep the earnest money. However, working with a strong agent will ensure you’re limiting your exposure so more earnest money will set you apart because it offsets risk to the seller. For example, planning to put 20% down? Consider putting 5% down as earnest money. I’ve helped clients win offers these past few weeks by putting up $5,000-$8,000 in earnest money when everybody else is doing just $1,000.

4. Stay lean with contingencies. In this market, overdoing it with requests will hurt your chances at winning the offer. Stick to 7-day due diligence periods. That’s more than enough time to do all your homework. Keep financing contingencies to less than 30-days. A strong lender and property organization on your behalf means you can get a loan done in about 3 weeks. If the numbers look good, consider foregoing the appraisal contingency and reassure the seller that if the home doesn’t appraise that you will work with the seller to pay the difference or absorb the extra cost. Again, working with a strong agent is important because you’ll know your numbers and the risk.

5. Write a personal letter to the seller. While this strategy doesn’t work too well with corporations or executors of estates, they do very well with traditional sellers. In the letter, write about how you love the home, how you’ll take care of it and reassure the seller your financing is strong and you will get the deal closed.

These are but just a few strategies and tactics you can use to set yourself apart to win a multiple offer scenario.  Hilton Head Real Estate Partners will be glad to assist you in your home search.

Hilton Head Real Estate News: Buying a Home Still Considered a “Best” Investment in U.S.

Buying a home has several unique advantages when compared with renting. Aside from being to decorate as you choose, receive additional tax benefits, enjoy stability in your housing payments, and increase your ability to make future investments, it just feels good to own your own home!

A survey conducted last month by the PEW Research Center, a non-profit, non-partisan organization considered a “fact tank” on social & demographic trends in America, determined that the majority of adult Americans (81%) still believe “that buying a home is the best long-term investment a person can make.” It is interesting to note that while the same study showed that 47% of those surveyed felt that current economic factors have resulted in a decrease in their current home value, those same home owners felt that their home investment was a safe one.

Even renters seem to agree with the idea of investing in a home, with 81% wishing to buy a home at some point, even if individual circumstances prevent it currently. In fact, when asked to rate long-term financial goals, homeownership and “being able to live comfortably in retirement” were rated the highest by 80% of those surveyed. Survey participants seemed to understand that owning a home provides more than an avenue for generating savings – it also is a place to live and provides an element of physical and emotional stability unlike other investment options.

Further pursuing this question, the survey compared investments – trying to determine which held fast in the long run – the stock market or the housing market. The answer was variable, depending on the year of investment, however, and unable to be determined overall. One item not considered in the survey is that owning a home provides income tax benefits that are not likely to be found in other investments, which could affect the dividend bottom line and how you choose to invest. Click here to view the survey in its entirety.

Short Sales & HAFA Changes – Hilton Head Short Sales



As homeowners seek to lessen their financial burdens in hard economic times, the Home Affordable Foreclosure Alternative (HAFA) was created and has since been updated to create short sales as an option to foreclosure and provide much needed assistance to homeowners throughout the United States.

On June 1, 2012, new developments to the HAFA program loosened the requirements for qualification, making more homeowners eligible for this popular program. Previously homeowners had to be behind in payments to qualify, yet now homeowners who are currently paying their mortgage can receive assistance, as well. Debt ratio requirements have been modified, making qualification easier to manage.

Another change is that homeowners no longer must “live” in the home for to be able to qualify for short sales. Prior to the program changes, a 12 month residency requirement had to be met by applicants. It’s also interesting to note that changes in the Home Affordable Refinance Program (HARP) allow more people the ability to refinance, as well, since home equity requirements have been reduced. Sellers who relocate can also receive relocation assistance of up to $3,000, and a variety of real-time, situational assistance by calling 888.995.HOPE (4673).

Perhaps the most historic change is that the new program does not impact a seller’s credit report as it did before. The credit report status of short sales can be listed as paid in full in most cases, making homeowners breath a little easier about their future, if a short sale is on the horizon.

To learn more about how these changes can individually impact you as a seller or how I can help you move through the short sales process quickly, please contact me. You can also read more about these changes directly by checking the HAFA website.