The impacts of COVID-19 are far-reaching and include not just health concerns, but concerns about jobs and the economy. An obvious result of the turbulent economy and the alarming rate Americans are losing their jobs is a down turn in the real estate market.
According to an article published by Market Watch, “…the rapid rise in unemployment as a result of the coronavirus pandemic and its accompanying stay-at-home orders will curtail many Americans’ ability to afford a purchase as big as a home”, states reporter Jacob Passy. Further, sellers are more hesitant to put their homes on the markets due to uncertainty about pricing and the desire to avoid strangers from entering their homes unnecessarily.As a result, Fannie Mae projects that home sales will fall by almost 15% in 2020.
Yet, this doesn’t necessarily translate to bad news the prices of homes. Fannie Mae still expects the median prices of homes to rise for both existing and new homes. Further, the article states, “The mortgage giant currently expects the U.S. economy and home sales both to rebound in 2021. But that rebound is contingent on the pandemic’s trajectory.”
Read the entire article.
Despite the fact that, according to survey data released by The Mortgage Bankers Association (MBA), December 2019 home sale activity lagged in comparison to November 2019, over all 2019 saw growth when compared to 2018.
New single family home sales only increased .1 percent from November to December of 2019, but without the seasonally-rate, numbers actually came in with about 3000 less new home sales in December compared to November. Yet, average loan sized increased by close to $10,000 for December 2019. A recap of the entire year, however, shows an increase of new mortgage applications almost 40 percent higher than 2018.
According to an article published by NationalMortgageProfessional.com, Joel Kan, MBA’s associate vice president of economic and industry forecasting is quoted, “The housing market is seeing signs of a more significant recovery in new residential construction, which is a promising sign for prospective homebuyers. Even though supply continues to lag, we expect to see another year of gradual growth in new home sales, supported by rising household formation and the healthy job market.”
Read the entire article.
Photo Credit: Gerd Altmann
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.
In many parts of the U.S., sales of new homes continued to have a downward trend in February, falling .6 percent from January. This, according to an article published by CNBC, is the third month in a row that the sales of new homes dropped.
In the article, the details of regional new home sales were provided. Bringing the U.S. average down were the Midwest with a 3.7 percent decrease in sales as well as the west, with a drop of almost 18 percent. The south and northeast regions of the U.S., however, saw increases in new home sales of 19.4 percent and 9 percent respectively.
An overall slow-down in sales is being attributed to a shortage of homes, specifically lower priced homes. As a result, the prices are being driven up, the median price of new homes is up almost 10 percent from last year. Couple this with rising mortgage interest rates, many first time homebuyers may have a difficult time entering the real estate market.
Read the entire article.
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.
The debate over why households choose renting over purchasing a home in the United States has been a hot topic lately. Analysts have indicated the young generation of millennials are not interested in being tied down to home ownership and prefer renting over buying. However, an article published by CNN by Daniel B. Kline, points out that it is not just millennials who are opting to rent instead of making a home purchase. Kline also notes that the decision to rent may not be a lifestyle choice, but a financially driven decision.
It is true that the number of households renting a home has increased over the past decade; almost by 10 million. It is also true that 65 percent of household headed by those 35 years old and younger rent their homes. However, it’s the heads of households aged 35-44 that made the biggest increase over the past decade. In this age group, “the percentage of renters jumped from 31% in 2006 to 41% in 2016”. Heads of households between 45-65 renting homes also increased over the past decade.
However, these households may not all be renting based on lifestyle choices. In fact, research indicates that many who rent homes would actually like to purchase a home someday. Further, surveys show that 65% of renters indicated that they are renting homes due to circumstances, not purely by choice. Circumstances such as increased home prices and tougher mortgage standards may be partially to blame.
Read the entire article.
Photo Credit: Mark Moz
As the season of spring begins to bloom all around us, so it goes for the spring real estate market. Many homeowners see spring as the perfect time to put their homes up for sale. As prospective home buyers begin their search for their first or next home, they may find that homes aren’t sitting on the market nearly as long as they have been in the past several months.
A recent report provided by a national real estate firm, Redfin, indicates that despite the fact the number of homes for sale has dipped 13 percent from last year at this time, actual home sales has surged 9 percent. Additionally, the number of days until the average home goes under contract has decreased by 11 days since last March, dropping to just 49 days. Lower inventory and fast paced home sales has also driven up the prices of home an average of 7.5 percent.
A CNBC article written by Diana Olick, goes on to detail that not only homeowners are benefiting from a spring jump start. Builders are also tracking a home sales increase of 6.7 percent from last year. However, new home prices have remained virtually unchanged. Olick suggests, this “…may indicate builders are trying to keep prices down in order to get more buyers in the door.”
Home buyers are looking to take advantage of the low mortgage rates and their desire to close the deal has resulted in some very favorable news for those looking to sell their homes.
Read the entire article.
Photo Credit: Guy Kilroy
The end of 2016 is just a matter of weeks away and, just as we have come to expect this time of the year, real estate analysts have begun making predictions about what could be in store for the 2017 real estate market. Many of these professionals and experts have similar expectations for the upcoming new year; some are based on anticipated changes that may be be ushered in as our new president takes office in January.
Housingwire.com journalist, Kelsey Ramirez, published a list of predictions made by Zillow. Among the expectations for the 2017 real estate market that made this list: increased development of smaller homes located closer to urban areas with access to public transportation, an increased of number of millennials purchasing homes, an increase in the affordability of renting, and an increase in the cost of building homes.
Another Housingwire.com article written by Ben Lane details some predictions made by Redfin. Lane indicates, “according to a new report from Redfin, homes will fly off the market in 2017, faster than any other year on record.” Another prediction on the Redfin list is an expectation that the housing market growth will continue, but at a slower pace than we saw in 2016. The company also predicts an increase in mortgage rates, yet do not expect a significant increase.
Read the entire article and find links to additional 2017 predictions.
If you have decided to sell your home, it may be tempting to make your listing appealing to potential buyers by leaving off some of your home’s “issues”. Perhaps they are issues you have learned to live with or do not feel are worthy of disclosure. In some cases, it might be a big enough issue that you feel it will scare buyers off. As tempting as it might be to not disclose a known issue, failure to do so could expose you to trouble down the road.
An article written by Warren Christopher Freiberg and published by Realtor.com provides some helpful tips regarding seller disclosures:
- If you are unsure whether or not to disclose an issue with your home, its best to error on the side of safety and disclose it.
- Even when its not required, it is a good idea to disclose previous inspection reports, no matter how old they are. It protects the seller from having the home purchaser claim they weren’t informed of a problem.
- If you truly were not aware of an issue with the home and it was not uncovered during the home inspection, you cannot be held responsible. As the article states, “You can’t be held responsible for not disclosing a defect if it’s discovered by the buyer a few months after closing. In fact, at a certain point the burden falls on buyers to do their due diligence to uncover any problems.”
- Do not provide information to the buyer if you are not sure of the answer. For example the exact square footage of the home. Inform the buyer that you are unaware of the answer and put the responsibility on the buyer to find the answer.
“It is much better to lose a buyer by clearly disclosing all known issues than it is to spend two years and tens of thousands of dollars in litigation,” is the advice certified real estate specialist, Adam Buck, provides.
Read the entire article.