At first glance, reported home sale prices that only increased .5% year over year in May 2020 might appear to be disappointing news for real estate professionals and their customers. However, according to an article published by Redfin.com, the slight gain was mostly impacted by the small number of homes selling in expensive U.S. cities. Further, Redfin’s lead economist Taylor Marr sees some positive news based on other spring sales numbers, stating, “Although the housing market was still mostly stalled in May, it’s worth noting that homes under contract to be sold jumped 33% between April and May after two consecutive months of decline. This is a key leading indicator for home sales in June and July. New listings of homes for sale have also likely passed their bottom…”
Nevertheless, the market still has a ways to go before it is back on track to performance during the pre-COVID-19 shut down. Although all large metro areas in the U.S. have seen significant declines in home sales as compared to last spring, areas such as Michigan and Pennsylvania saw decreases of over 60%. These are examples of a couple of states that were the most restrictive for staying at home during the pandemic’s initial outbreak.
Yet, good news appears to be on the horizon. New listings, according to the article, increased almost 36% from April. Additionally, days on the market and number of homes selling above list price remain positive, signs of a strong buyers’ market continued throughout the state wide shut downs, due to continued low inventory of homes and low mortgage rates.
Read the entire article for more details and highlights across the nation’s metro areas.
Real Estate professionals and publications have recently began to educate home owners and potential home buyers with current market trends. The common message is that there is an increase in home buyers but the supply of homes for sale is declining. The natural consequence of this low supply and high demand situation is for home prices to increase. The projected home values are continuing to increase, in fact experts have even adjusted their projections based on current market reports. According to an article published in The Patch, “CoreLogic increased their 12-month projection for home values from 4.5% to 5.6% over the last few months.”
Naturally, buyers become concerned that home prices are causing them to be priced out of a home or a neighborhood. However, the increase in home prices can’t be analyzed in a bubble. Other factors must be taken into account to determine whether or not increasing home prices are really making homes unaffordable.
In the article, written by Keith Kreis, other factors that should also be taken into consideration are discussed. For example, mortgage interest rates have dropped since the beginning of 2019 which has increased home affordability by almost 10 percent. Additionally, American workers are seeing wage growth by as much as 1.5% since last fall. By taking these additional economic factors into consideration, one might argue that, at this point in time, buying a home is more affordable than its been.
Read the entire article.
Buying a home can be an overwhelmingly stressful decision. There are many factors buyers need to take into account when making a final home purchase decision. Location, size, floor plan, down payments, and mortgage rates are a few that buyers must consider. The buyer’s budget is another very important factor that must be considered. It appears, however, that a specific group of buyers is more likely to go over their set budget when purchasing a home.
According to an article published by The M Report, buyers with children seem to have trouble sticking to their budget when purchasing a home. In fact, 25.6% of buyers with children exceeded their budget when purchasing a home. This group also had 31% that were denied a mortgage, where buyers without children only saw 11% denied mortgages.
It appears that having children in the home increases the list of demands that buyers make for their homes. They want shorter commute times to their workplace, which can put them in more desirable and expensive locations. The size of the home increases as the need for more space to accommodate growing families increases. Some buyers make sacrifices on these items in order to stay within, or at least closer, to their budget.
To make matters more stressful for this group of buyers, many decisions on home purchases can be rushed for families as they work to ensure they are settled before the school year begins.
Read the entire article.
Photo Credit: Franco Giovanella
The 2019 spring real estate market is in full swing and many home owners and prospective home buyers may be wondering what this year’s market has in store for them. Will home buyers be able to list their home and quickly receive a full-priced offer, maybe even multiple offers? Will prospective home buyers be competing against many other buyers and have to make quick and above list price offers?
Despite the fact that there are reports indicating we are on the horizon of another hot real estate market season, data from Trulia predicts something quite different. Trulia has collected data that reflects home prices have been in a steady decline since the beginning of 2018. This trend is the first indicator that the housing market may be entering into a “cyclical downturn”. In an article published by Housing Wire, Alcynna Lloyd quotes Trulia, “’Cyclical housing market downturns occur roughly every 10 years, and they typically don’t happen overnight. Instead, they play out steadily over a few years, first showing up in sales volumes and later—usually a year or two later—in prices,’ Trulia writes.”
Fear not, however, that we are in store for a declining market similar to the one that occurred a decade ago. The article goes on to detail the findings of the Trulia analysis, indicating home prices should only slightly decline and are more likely to just see “flat-to-modest housing price growth”. Yet, home owners should expect their home to sell not quite as quickly and should certainly be prepared to enter in more vigorous negotiations with buyers in order to finalize a sale.
Since these changes are not expected to be extreme or immediate, more likely gradual and result in slow steady declines or even flat growth, only time will tell how this potential change plays out.
Read the entire article.
The real estate market has, for the most part, been on a steady incline for the past 5-7 years, in terms of home values. Homeowners have been comfortably seeing the value of their house increase at a fairly consistent rate, recovering from the major decreases in value they saw about 10 years ago.
However, according to data released by Black Knight, the upward trend may be coming to an end, or at least slowing down some. According to an article published by Housing Wire, “Home values fell 0.2% in November, down $580 for the month and marking the first time the market has seen a consecutive three-month decline since early 2012. Now, the average home is down $1,361 in value since August 2018.”
Although the growth rate varies across the United States, overall home values are still higher than they were in 2017 in 99 of the 100 markets. So, many homeowners may still be breathing easy knowing that, over a larger span of time, the value of their home is moving in the right direction.
Read the entire article.
Could a housing market slowdown, or worse a housing market crash, be looming? If Lawrence Yun’s, National Association of Realtors chief economist, analysis is correct, the answer is a resounding “no”. In fact, the slowdown in the housing market that some areas are experiencing is due to “insufficient supply”, not a lack of demand by buyers.
In an article published by Realtor Magazine, many positive signs for the housing market are present. For example, the article states “home price growth remains strong in markets across the country—about 5 percent on a nationwide basis so far this year”.
However, the negative effect of the lack of housing supply is that the prices are being driven into price ranges that price some buyers out of the market. A solution to that issue,the article notes , would be to have builders increase the supply of homes available.
Read the entire article.
Real Estate is a popular investment vehicle for American investors. In fact, 89% of investors put their money into real estate, according to a report by Better Homes and Garden Real Estate. In a recent article published by Forbes, real estate experts provide reminders and warnings regarding real estate investments in order to help insure a profitable investment.
One real estate professional, Lee Kiser, reminds investors to study the real estate taxes of a property before making the purchase. Its important to understand what the upcoming tax liability may be down the road, and a real estate tax professional may be able to help an investor prepare accordingly.
Shelling out the money for a professional inspection and appraisal might not be top of the list for investors, but according to Angela Yaun of the Day Realty Group, it may help save more money for the investor later. The investor may be able to get items covered under a home warranty if they are proven to be functioning at the time of the inspection. It can also make the buyer aware of repair expenses they should plan for later. A professional appraisal will provide the most accurate square footage and appraised value, important facts to have on hand when the investor is looking to sell their property.
The article goes on to detail the importance of understanding Home Owners Association restrictions, obtaining a Master Land Use plan for the area surrounding the property, and getting accurate and professional estimates for repairs, holding costs and closing costs.
Read the entire article.
Photo Credit: Antonio Carlos Cascatrina
Low housing inventory coupled with low interest rates has helped encourage home owners to finally consider putting their home on the market. There are many considerations to take into account before listing a home. Being able to determine what home selling advice is based on fact versus myth is vital for a successful and profitable transaction. An article published in U.S. News and World Report, written by Teresa Mears, helps homeowners navigate the process by debunking some of the rumors and myths.
One home selling myth is that home owners should list the home at a price above what they actually expect to get for the home. According to Mears, “That’s because shoppers and their real estate agents often don’t even look at homes that are priced above market value.” Even if a homeowner lowers the price after a few weeks, the fact that it sat on the market for 3 weeks or more makes prospective buyers suspicious about issues with the home.
Sellers might often be tempted to sell a house on their own, without the use of a real estate professional, in order to save money. The value real estate professionals add to the process comes in the form of marketing to buyers and their agents, negotiating the sales price and sales contract and helping navigate any issues that come up after the inspection. When you hire and pay a real estate professional, you are able to take advantage of their experience and expertise from previous sales transactions.
Additional myths touched on include which home renovations home owners can expect to see a return on investment, and which renovations should not be done just to sell a home, whether open houses benefit the home owner and what your expectation for future market prices should be. Read the entire article.
If you have been waiting for the right time to sell your home, there are many reasons experts are saying that the time has come. In an article written by Devon Thorsby, published by U.S. News and World Report, the reasons that 2018 might prove to be a good time to sell a home are listed.
First and foremost, the past few years of low inventory of homes for sale has left prospective home buyers more than ready to scoop up the perfect house. Their frustration with available homes has led many house hunters to begin their search earlier than normal with the hopes of purchasing a home before other buyers make their offer.
Additionally, interest rates are still relatively low. They have been slowly creeping up and are expected increase to 5 percent in 2019. Many home buyers are motivated to purchase a home sooner rather than later in order to secure a lower interest rate.
Thorsby details additional rationale for putting that “For Sale” sign up this year. Read the entire article here.
One of the most important decisions a home owner who has decided to sell their home can make is what the list price of the home should be. Emotions, financial strains, and decisions based on inaccurate or misunderstood information can lead to a disappointing and frustrating sales process.
In an article published by Realtor.com, Cathie Ericson helps debunk home pricing myths that might have home sellers hung up on their list price. Reviewing these myths and understanding the truth about the pricing, listing and hopefully selling a home will help sellers start out on the right foot.
One myth sellers may believe that if a home is overpriced, it can just be lowered later without any negative effects. As Ericson points out, lowering a price is not a quick and easy fix. Many house hunters notice when a home has been on the market for a while and know when there have been numerous price reductions. As she states, “… buyers presume that something must be wrong with it. As such, they might still steer clear, or offer even less than the price you’re now asking.”
When deciding on a listing price, sellers may be turned off by the idea of pricing their home too low, assuming they will not make as much money in the sale. However, low priced homes might just attract more buyers and the increased interest in the home might result in a bidding war.
The article details the truth behind other myths such as recouping 100% of the cost of home renovations, the real estate agent’s stake in the pricing strategy and the whether all home owners make money on the sale of their home. Read the entire article.