You may have heard that the housing market is softening. There is no doubt that buyer traffic has decreased. There are fewer purchasers in the market than there were last month and at this time last year. What you may not have heard, however, is that there is still a severe shortage of listing inventory in many regions of the country.
In a recent interview discussing the housing market, First American’s Chief Economist Mark Fleming put it simply:
“The biggest challenge is really the availability of supply.”
When we look at available inventory numbers released by the National Association of Realtors (NAR), we see that the actual number of homes for sale has decreased in each of the last five months.
What does this mean to you as a seller?
The best time to sell is when there is less competition. That guarantees you a better price and fewer hassles in the transaction.
Bottom Line
If you are thinking of selling your house this year, the best time to put it on the market might be right now. Let’s get together to evaluate the demand for your house in our market!
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Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive the maximum value for your house?
Here are two keys to ensure that you get the highest price possible.
1. Price it a LITTLE LOW
This may seem counterintuitive, but let’s look at this concept for a moment. Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. By doing this, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.
HGTV gives this advice:
“First impressions are everything when selling your home. Studies have shown that the first two weeks on the market are the most crucial to your success. During these initial days, your home will be exposed to all active buyers.
If your price is perceived as too high, you will quickly lose this initial audience and find yourself relying only on the trickle of new buyers entering...
In today’s market, as home prices rise and a lack of inventory continues, some homeowners may consider trying to sell their homes on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for most sellers.
Here are the top five reasons:
1. Exposure to Prospective Buyers
According to NAR’s 2018 Profile of Home Buyers and Sellers, 95% of buyers searched online for a home last year. That is in comparison to only 13% of buyers looking at print newspaper ads. Most real estate agents have an Internet strategy to promote the sale of your home, do you?
2. Results Come from the Internet
Where did buyers find the homes they actually purchased?
- 50% on the Internet
- 28% from a real estate agent
- 7% from a yard sign
- 1% from newspapers
The days of selling your house by putting out a lawn sign or putting an ad in the paper are long gone. Having a strong Internet strategy is crucial.
3. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale by Owner:
- The buyer who wants the best deal possible
- The buyer’s agent who solely represents...
As we approach the end of the year, many homeowners find themselves asking the question, “If we’re currently in a strong real estate market, why won’t my house sell?”
Below are the 5 most common reasons why a listing contract will expire:
1. The Price
Sometimes when the market is hot, homeowners attempt to set their listing price higher. Their hope is that a motivated buyer will be willing to pay any price for a house in their desired neighborhood! Sellers must remember, though, that in today’s market a house must be sold twice; first to the buyer and then to their bank.
A buyer can agree to pay the homeowner’s asking price, but after the bank conducts their appraisal, the price might need to be adjusted. The bank will only give the buyer a mortgage for the value of determined in the appraisal.
Sellers must also keep in mind that today’s homebuyers are well-educated. Before they look to buy a house, they have already seen many houses online. They’ve done their research on the neighborhoods they are interested in, including information on the school districts in the area.
They will know if your house seems overpriced and will not waste their time considering it. This is why it’s so important to make sure that your home is priced right from day one on the market!
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Here are five reasons listing your home for sale this winter makes sense.
1. Demand Is Strong
The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase… and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home.
Take advantage of the buyer activity currently in the market.
2. There Is Less Competition Now
Housing inventory is still under the 6-month supply that is needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.
Historically, the average number of years a homeowner stayed in their home was six but has hovered between nine and ten years since 2011. There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be...
Many sellers believe that spring is the best time to place their homes on the market because buyer demand traditionally increases at that time of year, but what they don’t realize is that if every homeowner believes the same thing, then that is when they will have the most competition!
The #1 Reason to List Your Home in the Winter Months is Less Competition!
Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months’ supply of listings from the National Association of Realtors.
As you can see, the ‘sweet spot’ to list your home for the most exposure naturally occurs in the late fall and winter months (November – February).
Temperatures aren’t the only thing that heats up in the spring – so do listings!
In 2017, listings increased by nearly half a million houses from December to June. Don’t wait for these listings to come to market before you decide to list your house.
Added Bonus: Only Serious Buyers Are Out in the Winter
At this time of year, only those purchasers who are serious about buying a home will be in the marketplace....
Every year at this time there are many homeowners who decide to wait until after the holidays to list their homes for the first time, while others who already have their homes on the market decide to take them off until after the holidays.
Here are seven great reasons not to wait:
- Relocation buyers are out there. Many companies are still hiring throughout the holidays and need their new employees in their new positions as soon as possible.
- Purchasers who are looking for homes during the holidays are serious buyers and are ready to buy now.
- You can restrict the showings on your home to the times you want it shown. You will remain in control.
- Homes show better when decorated for the holidays.
- There is minimal competition for you as a seller right now. Inventory of homes for sale traditionally slows in the late fall, early winter. Let’s take a look at listing inventory as compared to the same time last year:
- The desire to own a home doesn’t stop when the holidays come. Buyers who were unable to find their dream homes during the busy spring and summer months are still searching!
- The supply of listings increases substantially after the holidays. Also, in many parts of the country, new construction will continue to surge and reach new heights which will lessen the demand for your house in 2019.
Bottom Line ...
According to a recent report by ATTOM Data Solutions, home sellers who sold their homes in the third quarter of 2018 benefited from rising home prices and netted an average of $61,232.
This is the highest average price gain since the second quarter of 2007 and represents a 32% return on the original purchase prices.
After the Great Recession, many homeowners were left in negative equity situations but home price appreciation in the recovery period since then has given homeowners something to smile about.
The results from ATTOM fall right in line with data from the latest edition of the National Association of Realtors’ (NAR) Profile of Home Buyers and Sellers. Below is a chart that was created using NAR’s data to show the percentage of equity that homeowners earned at the time of sale based on when they purchased their homes.
Even though those who purchased at the peak of the market netted less than those who bought before and after the peak, the good news is that there was a double-digit profit to be had! Many homeowners believe that they are still underwater which has led many of them to not even consider selling their houses.
Bottom Line
If you are curious about how much equity you’d earn if you sold your home, let’s get...
Over the past few years, two trends have emerged in the housing market:
- Home renovations have shot up
- Inventory of homes available for sale on the market has dropped
A ‘normal’ housing market is defined by having a 6-month supply of homes for sale. According to the latest Existing Home Sales Report from the National Association of Realtors, we are currently at a 4.4-month supply.
This low inventory environment has many current homeowners worried that they would be unable to find a home to buy if they were to list and sell their current houses, which is causing many homeowners to instead renovate their homes in an attempt to fit their needs.
According to Home Advisor, homeowners spent an average of $6,649 on home improvements over the last 12 months. If that number seems high, it also includes homeowners who recently bought fixer-uppers.
A new study from Zillow asked the question,
“Given a choice between spending a fixed amount of money on a down payment for a new home or fixing up their current home, what would you do?”
Seventy-six percent of those surveyed said that they would rather renovate their current homes than move. The results are broken down by generation below.
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According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the inventory of homes for sale this year compared to last year has increased for the last four months, all while sales of existing homes have slowed compared to last year’s numbers.
For over three years leading up to this point, the exact opposite was true; Inventory dropped as sales soared.
NAR’s Chief Economist Lawrence Yun shed some light on what could be contributing to this shift,
“This is the lowest existing home sales level since November 2015. A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”
Let’s take a deeper look:
Interest Rates
Since January, 30-year fixed mortgage interest rates have increased nearly a full percentage point (from 3.95% to 4.9%). Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association are all in agreement that rates will continue to increase to about 5.2% over the next 12 months.
“The rise in [mortgage] rates paired with this very strong price appreciation absolutely is slowing housing,” ...
There are many questions about where home sales are headed next year. We have gathered the most reliable sources to help answer this question. Here are our sources:
Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments.
The National Association of Realtors (NAR) – The largest association of real estate professionals in the world.
Freddie Mac – An organization which provides liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast.
Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets.
Here are their projections:
Bottom Line
Every source sees home sales growing next year. Let’s get together to chat about what’s going on in our neighborhood.
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With home prices on the rise and buyer demand still strong, some sellers may be tempted to tryand sell their homes on their own without using the services of a real estate professional.
Real estate agents are trained and experienced in negotiation and, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.
Here is a list of just some of the people with whom the seller must be prepared to negotiate with if they decide to For Sale by Owner (FSBO):
- The buyer who wants the best deal possible
- The buyer’s agent who solely represents the best interests of the buyer
- The buyer’s attorney (in some parts of the country)
- The home inspection companies, which work for the buyer and will almost always find someproblems with the house
- The termite company if there are challenges
- The buyer’s lender if the structure of the mortgage requires the sellers’ participation
- The appraiser if there is a question of value
- The title company if there are challenges with certificates of occupancy (CO) or other permits
- The town or municipality if you need to get the CO permits mentioned...
There are many questions about where home prices will be next year as well as where they may be headed over the next several years to come. We have gathered the most reliable sources to help answer these questions:
The Home Price Expectation Survey – A survey of over 100 market analysts, real estate experts, and economists conducted by Pulsenomics each quarter.
Zelman & Associates – The firm leverages unparalleled housing market expertise, extensive surveys of industry executives, and rigorous financial analysis to deliver proprietary research and advice to leading global institutional investors and senior-level company executives.
Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments.
Freddie Mac – An organization whose mission is to provide liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast.
The National Association of Realtors (NAR) – The largest association of real estate professionals in the world.
Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets always.
Here are their projections of prices going forward:
Bottom Line
Every source sees home prices continuing to appreciate – just at lower percentages...
Home values have risen dramatically over the last twelve months. In CoreLogic’s most recent Home Price Index Report, they revealed that national home prices have increased by 6.2% year-over-year.
CoreLogic broke down appreciation even further into four price ranges, giving us a more detailed view than if we had simply looked at the year-over-year increases in national median home price.
The chart below shows the four price ranges from the report, as well as each one’s year-over-year growth from July 2017 to July 2018 (the latest data available).
It is important to pay attention to how prices are changing in your local market. The location of your home is not the only factor which determines how much your home has appreciated over the course of the last year.
Lower-priced homes have appreciated at greater rates than homes at the upper ends of the spectrum due to demand from first-time home buyers and baby boomers looking to downsize.
Bottom Line
If you are planning to list your home for sale in today’s market, let’s get together to go over exactly what’s going on in your area and your price range.
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Rising home prices have been in the news a lot lately and much of the focus has been on whether home prices are accelerating too quickly, as well as how sustainable the growth in prices really is. One of the often-overlooked benefits of rising prices, however, is the impact that they have on a homeowner’s equity position.
Home equity is defined as the difference between the home’s fair market value and the outstanding balance of all liens (loans) on the property. While homeowners pay down their mortgages, the amount of equity they have in their homes climbs each time the value of their homes go up!
According to the latest Equity Report from ATTOM Data Solutions, “13.9 million U.S. properties in Q2 2018 were equity rich — where the combined estimated balance of loans secured by the property was 50 percent or less of the property’s estimated market value — representing 24.9% of all U.S. properties with a mortgage.”
This means that nearly a quarter of Americans who have a mortgage would be able to sell their homes and have a significant down payment toward their next home. Many who sell could also use their new-found equity to pay off high-interest credit cards or help children with tuition costs.
The map below shows the percentage of properties with a mortgage in each state that were equity rich in Q2 2018.
Bottom Line
If you are a homeowner looking to take advantage of your home equity by moving up to your...
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