Planning to Retire? Your Equity Can Help You Make a Move
Reaching retirement is a significant milestone in life, bringing with it a lot of change and new opportunities. As the door to this exciting chapter opens, one thing you may be considering is selling your house and finding a home better suited for your evolving needs. Fortunately, you may be in a better position to make a move than you realize. Here are a few reasons why. Consider How Long You’ve Been in Your Home From 1985 to 2009, the average length of time homeowners stayed in their homes was roughly six years. But according to the National Association of Realtors (NAR), that number is higher today. Since 2010, the average home tenure is just over nine years (see graph below): This means many homeowners have been living in their houses even longer in recent years. When you live in a home for such a significant amount of time, it’s natural for you to experience changes in your life while you’re in that house. As those life changes and milestones happen, your needs may change. And if your current home no longer meets them, you may have better options waiting for you. Consider the Equity You’ve Gained And, if you’ve been in your home for more than a few years, you’ve likely built-up substantial equity that can fuel your next move. That’s because you gain equity as you pay down your loan and as home prices appreciate. And, the longer you’ve been in your home, the more you may have gained. Data from the Federal Housing Finance Agency (FHFA) illustrates that point (see graph below): While home prices vary by area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by nearly 60%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time. Whether you’re looking to downsize, relocate to a dream destination, or move so you live closer to friends or loved ones, that equity can help. Whatever your home goals are, a trusted real estate agent can work with you to find the best option. They’ll help you sell your current house and guide you as you buy the home that’s right for you and your lifestyle today. Bottom Line As you plan for your retirement, connect with a local real estate agent to find out how much equity you’ve built up over the years and plan how you can use it toward the purchase of a home that fits your changing needs.
Read MoreHomeowners Have a Lot of Equity Right Now
Homeowners Have a Lot of Equity Right Now September 1, 2023 Some Highlights Your equity grows as you pay down your home loan and as home prices increase. With home prices rising again, your equity is getting an extra boost. Almost half of homeowners are equity rich because they have at least 50% equity in their homes. If you’ve been in your home for a while, you might have gained a considerable amount of equity, too. Want to find out how much equity you have? Connect with a trusted real estate agent for a Professional Equity Assessment Report (PEAR).
Read MoreHow Inflation Affects the Housing Market
How Inflation Affects the Housing Market August 31, 2023 Have you ever wondered how inflation impacts the housing market? Believe it or not, they’re connected. Whenever there are changes to one, both are affected. Here’s a high-level overview of the connection between the two. The Relationship Between Housing Inflation and Overall Inflation Shelter inflation is the measure of price growth specific to housing. It comes from a survey of renters and homeowners that’s done by the Bureau of Labor Statistics (BLS). The survey asks renters how much they’re paying in rent, and homeowners how much they’d rent their homes for, if they weren’t living in them. Much like overall inflation measures the cost of everyday items, shelter inflation measures the cost of housing. And for four consecutive months, based on that survey, shelter inflation has been coming down (see graph below): Why does this matter? Well, shelter inflation makes up about one-third of overall inflation, as measured by the Consumer Price Index (CPI). So, when shelter inflation moves, it leads to noticeable moves in overall inflation. That means the recent dip in shelter inflation might be a sign that overall inflation could fall in the months ahead. That moderation would be a welcome sight for the Federal Reserve (the Fed). They’ve been working to get inflation under control since early 2022. While they’ve made some headway (it peaked at 8.9% in the middle of last year), they’re still trying to get to their 2% goal (the latest report is 3.3%). Inflation and the Federal Funds Rate What’s the Fed been doing to lower inflation? They’ve been increasing the Federal Funds Rate. That interest rate influences how much it costs banks to borrow money from each other. When inflation climbed, the Fed responded by raising the Federal Funds Rate to keep the economy from overheating. The graph below shows the relationship between the two. Each time inflation (shown in the blue line) starts to climb, the Fed raises the Federal Funds Rate (shown in the orange line) to try to get it back to their target of 2% (see below): The circled portion of the graph shows the most recent spike in inflation, the Fed’s actions to raise the Federal Funds Rate to fight that, and the moderation of inflation that happened in response to that hike. As inflation gets closer to the Fed’s current 2% goal, they may not need to raise the Federal Funds Rate much further. A Brighter Future for Mortgage Rates? So, what does all of this mean for you? While the actions coming out of the Fed don’t determine mortgage rates, they do have an impact. As Mortgage Professional America (MPA) explains: “. . . mortgage rates and inflation are connected, however indirectly. When inflation rises, mortgage rates rise to keep up with the value of the US dollar. When inflation drops, mortgage rates follow suit.” While no one can predict the future for mortgage rates, it’s encouraging to see the signs of moderating inflation in the economy. Bottom Line Whether you’re looking to buy, sell, or just stay informed about the housing market, let’s connect.
Read MoreBuyer Traffic Is Still Stronger than the Norm
Buyer Traffic Is Still Stronger than the Norm August 30, 2023 Are you putting off selling your house because you’re worried no one’s buying because of where mortgage rates are? If so, know this: the latest data shows plenty of buyers are still out there, and they’re purchasing homes today. Here’s the data to prove it. The ShowingTime Showing Index is a measure of buyers touring homes. The graph below uses the latest numbers available and compares them to the same month in the last normal years to show just how active today’s buyers still are: As you can see, when June 2023 numbers are stacked alongside what’s typical for the housing market at this time of year, it's clear buyers are still active. And, they’re actually a lot more active than the norm. If you’re wondering how this could possibly be true, it’s because buyers are getting used to higher mortgage rates and accepting them as the new reality. As Danielle Hale, Chief Economist, Realtor.com, explains: “Interest rate hikes continue to further cut into buyers' purchasing power, although they appear to have adapted to the higher mortgage rate environment . . .” It’s simple. Buyers will always need to buy, and those who can afford to move at today’s rates are going to do so. The Key Takeaway for You While it’s true things have slowed down from the frenzy of the last couple of years, it doesn’t mean today’s market is at a standstill. The reality is: buyer traffic is still strong today. Even with today’s mortgage rates, plenty of buyers are still making their moves. So why delay your own move when there’s clearly a market for your house? Bottom Line Don’t put off your plans because you’re worried no one will buy your home. The opposite is true, and more buyers are more active than the norm. Let’s connect to get your house ready to sell, so it makes the best first impression possible on those eager buyers.
Read MoreWhy You May Still Want To Sell Your House After All
Why You May Still Want To Sell Your House After All August 29, 2023 Even though you may feel reluctant to sell your house because you don’t want to take on a mortgage rate that’s higher than the one you have now, there’s more to consider. While the financial side of things does matter, your personal needs may actually matter just as much. As an article from Bankrate says: “Deciding whether it’s the right time to sell your home is a very personal decision. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market.” So, ask yourself this: why did I want to move in the first place? Chances are your primary motivation wasn’t just financial in nature. Why you’re really thinking about selling likely has more to do with something changing in your life or a shift in what you need out of your house. Reasons Homeowners Still Need To Sell Today Let’s explore some of the most common reasons sellers are moving today. A recent article from Builder Online helps shed light on this. In this research, they identified the following categories: Marriage – If you just got married, you may find you either need more space than you currently have, or the two of you want to find a new place you picked out together. Divorce – If you’re getting separated or are divorcing your partner, chances are it’ll be difficult to live under the same roof. Selling the place you have, so you can own get your own spot, may be necessary. Births – If your household is growing, you may need more square footage, including more bedrooms. If you’re running out of room for everyone, you may not be able to wait to move. Deaths – If you’ve recently lost a loved one, it can be hard to spend time in that home. You may need to move for financial reasons or because you no longer need all the space. Retirement – If you’re in the process of retiring, or you just did, you may be looking to downsize to cut costs, relocate to be closer to loved ones, or move to a dream location. In this new phase of life, your current home may not be able to deliver what you need. You may find you share one of these top motivators. If any of these resonate with you, it may be time to move so you can find a house better suited to your changing needs. A survey from Realtor.com finds other sellers are in the same boat. It says, 1 in 4 sellers are choosing to move for personal reasons, even with current mortgage rates: “. . . more than half of seller-buyers (56%) who are planning to sell in the next 12 months said they are waiting for rates to come down, while 25% need to sell soon for personal reasons.” If you need to sell now because something in your own life has changed, don’t let rates hold you back from what you want. You have options to help make that move possible. You can use the equity you already have in your current home toward your next purchase. And with how much equity homeowners have right now, you may be able to finance less than you’d expect, or pay all cash to avoid borrowing at all. Bottom Line When you're ready to prioritize your changing needs, let’s connect. You need an expert on your side to help you list your house and find a home that delivers on everything you're looking for.
Read MoreToday’s Housing Market Has Only Half the Usual Inventory
Today’s Housing Market Has Only Half the Usual Inventory August 25, 2023 Some Highlights There are only about half the number of homes for sale compared to the last normal years in the market. That means buyers don’t have enough options right now. So, if you work with an agent to list your house, it should be in the spotlight. If you're thinking of selling, let’s connect so your house can stand out while there’s such a shortage of supply and buyers are craving more options.
Read MoreMore Jobs and Better Pay Leads to More Buyer Demand
More Jobs and Better Pay Leads to More Buyer Demand August 24, 2023 There’s been talk about a recession for quite a while now. But the economy has been remarkably resilient. Why? One reason is employment and wages have stayed strong. Let’s look at the latest information on each one and why both are good news if you’re thinking about selling your house. More Jobs Are Being Created Instead of facing the job losses typical of any recession, the economy has been growing and adding jobs. According to the Bureau of Labor Statistics (BLS), 187,000 jobs were created in July, which is up from the 185,000 created in June. That means more people are finding work. In fact, so many jobs are being added that the unemployment rate is far lower than the long-term average of 5.7% (see graph below): A low unemployment rate means that most people who want to work are finding jobs. When people have jobs, they have steady incomes – and that can help set them up to consider homeownership. People Are Making More Money And data also shows hourly earnings have been going up pretty steadily over the past few years (see graph below): When wages rise, people have more money that they could save or use toward buying a home. This increase in income helps offset some of the affordability challenges in the housing market today. Affordability depends on three main factors: wages, home prices, and mortgage rates. With higher home prices and mortgage rates right now, Builder Online summarizes how growing wages can help: “The housing market has been a beneficiary of the strong economy and labor market. Many of those employed have saved money over the past few years and used those funds toward a down payment on a home.” If you’re thinking about selling your house, a strong job market, growing wages, and the resulting buyer demand is fantastic news. It means there’s a larger pool of potential buyers out there who are in a position to pursue their dreams of homeownership. Bottom Line With more jobs and rising wages creating eager buyers, there’s a lot going in your favor. Let’s connect so you have someone who can guide you through the process of selling your house, from setting the right price to getting your home ready to show.
Read MoreWhy You Need a True Expert in Today’s Housing Market
Why You Need a True Expert in Today’s Housing Market August 23, 2023 The housing market continues to shift and change, and in a fast-moving landscape like we’re in right now, it’s more important than ever to have a trusted real estate agent on your side. Whether you’re buying your first home or selling once again, it’s mission critical to work with an expert who can guide you through each unique step of the process. The reality is, not all agents operate the same way. To truly make a powerful and confident decision as you buy or sell a home, you need a real estate expert who uses their knowledge of what’s really happening with home prices, housing supply, industry projections, and more to give you the best possible advice. Someone who can provide clarity and trust like that is essential to your success. Jay Thompson, Real Estate Industry Consultant, explains: “Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.” Unfortunately, when information in the media isn’t clear, it can generate a lot of fear and uncertainty for consumers. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says: “In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.” But it doesn’t have to be that way. Buying a home is a big decision, and it should be one you feel confident making. You can lean on an expert to help you separate fact from fiction and get the answers you need. The right agent can assist you in figuring out what’s going on at the national level and in your local area. They can debunk headlines using data you can trust. Experts have in-depth knowledge of the industry and can provide context, so you know how current trends compare to the normal ebbs and flows in the housing market, historical data, and more. Then, to make sure you have the full picture, an agent can tell you if your local area is following the national trend or if they’re seeing something different in your market. Together, you can use all that information to make the best possible decision. After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where a trusted expert comes in. Bottom Line If you want sound advice and trusted information about our local housing market, let’s connect.
Read MoreWhy Median Home Sales Price Is Confusing Right Now
Why Median Home Sales Price Is Confusing Right Now August 21, 2023 The National Association of Realtors (NAR) is set to release its most recent Existing Home Sales (EHS) report tomorrow. This monthly release provides information on the volume of sales and price trends for homes that have previously been owned. In the upcoming release, it’ll likely say home prices are down. This may seem a bit confusing, especially if you’ve been following along and reading the blogs saying home prices have hit the bottom and have since rebounded. So, why would this say home prices are falling when so many other price reports say they’re going back up? It all depends on the methodology of each one. NAR reports on the median home sales price, while some other sources use repeat sales prices. Here’s how those approaches differ. The Center for Real Estate Studies at Wichita State University explains median sales prices like this: “The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less . . . For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.” Investopedia helps define what a repeat sales approach means: “Repeat-sales methods calculate changes in home prices based on sales of the same property, thereby avoiding the problem of trying to account for price differences in homes with varying characteristics.” The Challenge with the Median Home Sales Price Today As the quotes above say, the approaches can tell different stories. That’s why median home sales price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are appreciating again. Bill McBride, Author of the Calculated Risk blog, sums the difference up like this: “Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.” To drive this point home, here’s a simple explanation of median value (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median value (the middle one) is 10 cents. If you have two nickels and one dime, the median value is now five cents. In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change. That’s why using the median home sales price as a gauge of what’s happening with home values may be confusing right now. Most buyers look at home prices as a starting point to determine if they match their budgets. But most people buy homes based on the monthly mortgage payment they can afford, not just the price of the house. When mortgage rates are higher, you may have to buy a less expensive home to keep your monthly housing expense affordable. That’s why a greater number of ‘less-expensive’ houses are selling right now – and that’s causing the median home sales price to decline. But that doesn’t mean any single house lost value. When you see the stories in the media that prices are falling later this week, remember the coins. Just because the median home sales price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by affordability and current mortgage rates. Bottom Line For a more in-depth understanding of home price trends and reports, let’s connect.
Read MoreDon’t Expect a Flood of Foreclosures
Don’t Expect a Flood of Foreclosures August 16, 2023 The rising cost of just about everything from groceries to gas right now is leading to speculation that more people won’t be able to afford their mortgage payments. And that’s creating concern that a lot of foreclosures are on the horizon. While it’s true that foreclosure filings have gone up a bit compared to last year, experts say a flood of foreclosures isn’t coming. Take it from Bill McBride of Calculated Risk. McBride is an expert on the housing market, and after closely following the data and market environment leading up to the crash, he was able to see the foreclosures coming in 2008. With the same careful eye and analysis, he has a different take on what’s ahead in the current market: “There will not be a foreclosure crisis this time.” Let’s look at why another flood is so unlikely. There Aren’t Many Homeowners Who Are Seriously Behind on Their Mortgage Payments One of the main reasons there were so many foreclosures during the last housing crash was because relaxed lending standards made it easy for people to take out mortgages, even if they couldn't show that they’d be able to pay them back. At that time, lenders weren’t being very strict when assessing applicant credit scores, income levels, employment status, and debt-to-income ratio. But now, lending standards have tightened, leading to more qualified buyers who can afford to make their mortgage payments. And data from Freddie Mac and Fannie Mae shows the number of homeowners who are seriously behind on their mortgage payments is declining (see graph below): Molly Boese, Principal Economist at CoreLogic, explains just how few homeowners are struggling to make their mortgage payments: “May’s overall mortgage delinquency rate matched the all-time low, and serious delinquencies followed suit. Furthermore, the rate of mortgages that were six months or more past due, a measure that ballooned in 2021, has receded to a level last observed in March 2020.” Before there can be a significant rise in foreclosures, the number of people who can’t make their mortgage payments would need to rise. Since so many buyers are making their payments today, a wave of foreclosures isn’t likely. Bottom Line If you’re worried about a potential flood of foreclosures, know there’s nothing in the data today to suggest that’ll happen. In fact, qualified buyers are making their mortgage payments at a very high rate.
Read MoreEquity Is a Game Changer for Homeowners Looking To Sell
Equity Is a Game Changer for Homeowners Looking To Sell August 15, 2023 If you’re a homeowner, you might be torn on whether or not to sell your house right now. Maybe that’s because you don’t want to take on a higher mortgage rate on your next home. If that’s your biggest hurdle, understanding your equity may be exactly what you need to help you feel more comfortable making your move. What Equity Is and How It Works Equity is the current value of your home minus what you owe on the loan. And recently, that equity has been growing far faster than you may expect. Over the last few years, home prices rose dramatically, and that gave your equity a big boost very quickly. While the market has started to normalize, there’s still an imbalance between the number of homes available for sale and the number of buyers looking to make a purchase. And it’s because homes are in such high demand that prices are back on the rise today. Rob Barber, CEO of ATTOM, a property data provider, explains: “Equity levels were high even during the recent downturn, and now they are going back up and better than ever.” How Equity Benefits You in Today’s Market With today’s affordability challenges, that equity can be a game changer when you move. Here’s why. Based on data from ATTOM and the Census, nearly two-thirds (68.7%) of homeowners have either paid off their mortgages or have at least 50% equity (see chart below): That means roughly 70% have a tremendous amount of equity right now. Once you sell your house, you can use your equity to help with your next purchase. It could be some (if not all) of what you’ll need for your next down payment. It may even be enough to allow you to put a considerably larger down payment on your next home, so you don’t have to finance quite as much. And, if you’ve been in your current house for years, you may have even built up enough equity to pay in all cash. If that’s true for you, you’d be able to avoid borrowing altogether, so you wouldn’t have to worry about today’s mortgage rates. How To Find Out How Much Equity You Have The best way to learn how much you have is to reach out to a trusted real estate agent for a Professional Equity Assessment Report (PEAR). Bottom Line If you’re planning to make a move, the equity you’ve gained can make a big impact. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, let’s connect.
Read MoreHome Prices Are Back on the Rise
Home Prices Are Back on the Rise August 11, 2023 Some Highlights Looking at monthly home price data from six expert sources shows the worst home price declines are behind us, and they’re rising again nationally. If you’ve put your plans to move on pause because you were worried about home prices crashing, this rebound is good news. Let’s connect so you know what’s happening with prices in our area.
Read MoreAbout 11,000 Houses Will Sell Today
About 11,000 Houses Will Sell Today Some homeowners have been waiting for months to put their house on the market because they don’t think people are buying homes right now. If that’s you, know that even though the housing market has slowed compared to the frenzy of a couple of years ago, it isn’t at a standstill. Contrary to what you may believe, buyers are still active and plenty of homes are selling right now. According to the National Association of Realtors (NAR), based on the pace of sales right now, just over 4 million homes will sell this year. With some simple math, let’s break down what that really means for you: 4.16 million homes divided by 365 days in a year = 11,397 houses sell each day 11,397 divided by 24 hours in a day = 475 houses sell per hour 475 divided by 60 minutes in an hour = about 8 houses sell each minute So, on average, about 11,000 homes sell each day in this country. A real estate expert can give you more information about how many houses are being sold in your neighborhood, the amazing advantages that sellers are experiencing right now, and the most important things buyers are searching for in your area. Together you’ll use this knowledge to shape how you market your house based on local trends. Bottom Line If you’ve been waiting to sell because you don’t think there are buyers out there, know today’s market is active. Every day you wait, around 11,000 other homeowners are selling. In the time it took you to read this, eight homes sold. When you’re ready to sell too, let’s connect.
Read MoreHousing Market Forecast for the Rest of 2023
Housing Market Forecast for the Rest of 2023 August 4, 2023 Some Highlights Want to know what experts say will happen in the rest of 2023? Home prices are already appreciating again in many areas. The average of the expert forecasts shows positive price growth. Where mortgage rates go for the rest of the year will depend on inflation. Based on historical trends, rates are likely to ease as inflation continues to cool. Even though low inventory continues to be a challenge, experts project 5 million homes will still sell this year. That pace should pick up if rates come down.
Read MoreSellers: Don’t Let These Two Things Hold You Back
Sellers: Don’t Let These Two Things Hold You Back August 1, 2023 Many homeowners thinking about selling have two key things holding them back. That’s feeling locked in by today’s higher mortgage rates and worrying they won’t be able to find something to buy while supply is so low. Let’s dive into each challenge and give you some helpful advice on how to overcome these obstacles. Challenge #1: The Reluctance to Take on a Higher Mortgage Rate According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below): But today, the typical 30-year fixed mortgage rate offered to buyers is closer to 7%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as the mortgage rate lock-in effect. The Advice: Waiting May Not Pay Off While experts project mortgage rates will gradually fall this year as inflation cools, that doesn’t necessarily mean you should wait to sell. Mortgage rates are notoriously hard to predict. And, right now home prices are back on the rise. If you move now, you’ll at least beat rising home prices when you buy your next home. And, if experts are right and rates fall, you can always refinance later if that happens. Challenge #2: The Fear of Not Finding Something to Buy When so many homeowners are reluctant to take on a higher rate, fewer homes are going to come onto the market. That’s going to keep inventory low. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains: “Inventory will remain tight in the coming months and even for the next couple of years. Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years.” Even though you know this limited housing supply helps your house stand out to eager buyers, it may also make you feel hesitant to sell because you don’t want to struggle to find something to purchase. The Advice: Broaden Your Search If fear you won’t be able to find your next home is the primary thing holding you back, remember to consider all your options. Looking at all housing types including condos, townhouses, and even newly built homes can help give you more to choose from. Plus, if you’re able to work fully remote or hybrid, you may be able to consider areas you hadn’t previously searched. If you can look further from your place of work, you may have more affordable options. Bottom Line Instead of focusing on the challenges, focus on what you can control. Let’s connect so you’re working with a professional who has the experience to navigate these waters and find the perfect home for you.
Read MorePricing Your House Right Still Matters Today
Pricing Your House Right Still Matters Today July 31, 2023 While this isn’t the frenzied market we saw during the ‘unicorn’ years, homes that are priced right are still selling quickly and seeing multiple offers right now. That’s because the number of homes for sale is still so low. Data from the National Association of Realtors (NAR) shows 76% of homes sold within a month and the average saw 3.5 offers in June. To set yourself up to see advantages like these, you need to rely on an agent. Only an agent has the expertise needed to find the right asking price for your house. Here’s what’s at stake if that price isn’t accurate for today’s market value. The price you set for your house sends a message to potential buyers. Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with it. Not to mention, if you undervalue your house, you could leave money on the table, which decreases your future buying power. On the other hand, price it too high and you run the risk of deterring buyers from ever touring it in the first place. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home. A recent article from NerdWallet sums it up like this: "Your house’s market debut is your first chance to attract a buyer and it’s important to get the pricing right. If your home is overpriced, you run the risk of buyers not seeing the listing . . . But price your house too low and you could end up leaving some serious money on the table. A bargain-basement price could also turn some buyers away, as they may wonder if there are any underlying problems with the house." Think of pricing your home as a target. Your goal is to aim directly for the center – not too high, not too low, but right at market value. Pricing your house fairly based on market conditions increases the chance you’ll have more buyers who are interested in purchasing it. That makes it more likely you’ll see multiple offers too. Plus, when homes are priced right, they still tend to sell quickly. To get a high-level look into the potential downsides of over or underpricing your house and the perks that come with pricing it at market value, see the chart below: Lean on a Professional’s Expertise to Price Your House Right So why is an agent essential in finding the right price? Your local agent has the skill and the insight necessary to find the market value of your home. They’ll use their expertise to determine a realistic listing price by assessing: The prices of recently sold homes The current market conditions The size and condition of your house The location of your house Bottom Line Pricing your house at market value is critical, so don’t rely on guesswork. Let’s connect to make sure your house is priced right for today’s market.
Read MoreHomebuyers Are Still More Active Than Usual
Homebuyers Are Still More Active Than Usual July 27, 2023 Even though the housing market is no longer experiencing the frenzy that was so characteristic of the last couple of years, it doesn’t mean today’s market is at a standstill. In actuality, buyer traffic is still strong today. The ShowingTime Showing Index is a measure of how much buyers are touring homes. The graph below uses that index to illustrate buyer activity trends over time to help put today into the proper perspective. It shows there’s seasonality in real estate. If you look at the last normal years in the market (shown in gray), there was a consistent pattern as buyer activity peaked in the first half of each year (during the peak homebuying season in the spring) and slowed as each year came to a close. When the pandemic hit in March of 2020, that trend was disrupted as the market responded to the resulting uncertainty (shown in blue in the middle). From there, we entered the ‘unicorn’ years of housing (shown in pink). This is when mortgage rates were record-low and buyer demand was sky high. Similar seasonal trends still existed even during that time, just at much higher levels. Now, let’s look at 2023. Traffic is down from the previous month and it’s also lower than the peaks we saw in the ‘unicorn’ years. But what’s happening isn’t a steep drop off in demand – it’s a slow return toward more normal seasonality. As the ShowingTime report explains: “Showing traffic declined about 10% in May . . . This follows a typical seasonal pattern – disrupted by the pandemic but now beginning to return . . .” And, to highlight this isn’t a drastic decline, let’s zoom in. Here’s a graph using just the May data for the last five years. It shows just how strong buyer demand still is. What Does That Mean for You? Buyers are still out there touring homes. They’re more active than they were in May 2022 (when sticker shock over higher mortgage rates started to set in) and certainly more than they were in the last normal years. So, remember, buyer activity is still strong. And it could actually be even stronger if it wasn’t constrained by the limited supply of homes for sale. According to U.S. News: “Housing markets have cooled slightly, but demand hasn’t disappeared, and in many places remains strong largely due to the shortage of homes on the market.” Bottom Line Don’t lose sight of just how active the market still is today. If your house isn’t on the market, it’s not getting in front of all those buyers who are looking to make a purchase right now. Let’s connect to start the process.
Read MoreHomebuyers Are Getting Used to the New Normal
Homebuyers Are Getting Used to the New Normal July 18, 2023 Before you decide to sell your house, it’s important to know what you can expect in the current housing market. One positive trend right now is homebuyers are adapting to today’s mortgage rates and getting used to them as the new normal. To better understand what’s been happening with mortgage rates lately, the graph below shows the trend for the 30-year fixed mortgage rate from Freddie Mac since last October. As you can see, rates have been between 6% and 7% pretty consistently for the past nine months: According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), mortgage rates play a significant role in buyer demand and, by extension, home sales. Yun highlights the positive impact of stable rates: “Mortgage rates heavily influence the direction of home sales. Relatively steady rates have led to several consecutive months of consistent home sales.” As a seller, hearing that home sales are consistent right now is good news. It means buyers are out there and actively purchasing homes. Here’s a bit more context on how mortgage rates have impacted demand recently. When mortgage rates surged dramatically last year, escalating from roughly 3% to 7%, many potential buyers felt a bit of sticker shock and decided to hold off on their plans to purchase a home. However, as time has passed, that initial shock has worn off. Buyers have grown more accustomed to current mortgage rates and have accepted that the record-low rates of the last few years are behind us. As Doug Duncan, SVP and Chief Economist at Fannie Mae, says: “. . . consumers are adapting to the idea that higher mortgage rates will likely stick around for the foreseeable future.” In fact, a recent survey by Freddie Mac reveals 18% of respondents say they’re likely to buy a home in the next six months. That means nearly one out of every five people surveyed plan to buy in the near future. And that goes to show buyers are planning to be active in the months ahead. Of course, mortgage rates aren’t the sole factor affecting buyer demand. No matter where mortgage rates stand, people will always have reasons to move, whether it’s for job relocation, changing households, or any other personal motivation. As a seller, you can feel confident there is a market for your house today. And that demand is pretty strong as buyers settle into where rates are right now. Bottom Line The way buyers perceive today’s mortgage rates is shifting – they’re getting used to the new normal. Steady rates are contributing to strong buyer demand and consistent home sales. Let’s connect so we can get your house on the market and in front of those buyers.
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Home Prices Are Rebounding July 17, 2023 If you’re following the news today, you may feel a bit unsure about what’s happening with home prices and fear whether or not the worst is yet to come. That’s because today’s headlines are painting an unnecessarily negative picture. If we take a year-over-year view, home prices did drop some, but that’s because we’re comparing to a ‘unicorn’ year when prices peaked well beyond the norm. To avoid an unfair comparison to that previous peak, we need to look at monthly data. And that tells a very different and much more positive story. While local home price trends still vary by market, here’s what the national data tells us. The graphs below use recent monthly reports from three sources to show the worst home price declines are already behind us, and prices are appreciating nationally. Looking at this monthly view, we can see the past year in the housing market can be divided into two parts. In the first half of 2022, home prices were going up, and fast. However, starting in July, prices began to go down (shown in red in the graphs above). By around August or September, the trend started to stabilize. But, looking at the most recent data for early 2023, these graphs also show that prices are going up again. The fact that all three reports show prices have been going up for three or more straight months is an encouraging sign for the housing market. The month-over-month data indicates a national shift is happening – home prices are rising again. Craig J. Lazzara, Managing Director at S&P Dow Jones Indices, says this about home price trends: “If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument.” Experts believe one of the reasons prices didn’t crash like some expected is because there aren’t enough available homes for the number of people who want to buy them. Even with today’s mortgage rates, there are more people looking to buy than there are homes available for sale. Mark Fleming, Chief Economist at First American, explains how more demand than supply keeps upward pressure on prices: “History has shown that higher rates may take the steam out of rising prices, but it doesn’t cause them to collapse entirely. This is especially true in today’s housing market, where the demand for homes continues to outpace supply, keeping the pressure on house prices." Doug Duncan, Senior VP and Chief Economist at Fannie Mae, states home price growth is exceeding expectations thanks to that high demand: “. . . housing prices continue to show stronger growth than what was previously expected . . . Housing’s performance is a testimony to the strength of demographic-related demand . . .” Here’s How This Affects You Buyers: If you've been holding off on buying because you were worried the value of your home would go down, knowing home prices have bounced back should bring you some relief. It also gives you the opportunity to own something that usually becomes more valuable as time goes on. Sellers: If you've been waiting to sell your house because you were concerned about how changing home prices would affect its value, it might be a good idea to team up with a real estate agent to list your house. You don't have to wait any longer because the latest data suggests things are turning in your favor. Bottom Line If you delayed your moving plans because you were concerned about home prices dropping, the latest data reveals the worst is already over, and prices are appreciating nationally. Let's get in touch so you know what's happening with home prices in our area.
Read More Low Housing Inventory Is a Sweet Spot for Sellers
Some Highlights Today’s housing inventory is still well below more normal years. This low inventory is why homes that are priced right are still selling quickly and seeing multiple offers. If you want to sell your house, now is a great time because inventory is still low. Contact a trusted real estate agent to start the process.
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