Some of the housing headlines are causing concern for some consumers who are in the process of either buying or selling a home. Pundits are concerned over the lack of new construction or the month-over-month sales numbers. Let’s set the record straight; 2015 was a good year for residential real estate in the United States and 2016 is starting out stronger. Continue reading…
In today’s market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.
Here are five of those reasons: Continue reading…
- This is the 48th consecutive month with year-over-year price gains.
- Lawrence Yun, NAR’s Chief Economist says that, “The main issue continues to be a supply & affordability problem. Finding the right property at an affordable price is burdening many potential buyers.”
- Inventory is still below historic normals at a 4.4 month supply.
CoreLogic’s latest Equity Report revealed that one million borrowers regained equity in their homes in 2015. The outlook for 2016 remains positive as well, as an additional 850,000 properties would regain equity if home prices rose another 5% this year.
The study also revealed:
- 95% of homes valued over $200,000 now have a positive equity position
- 87% of homes valued under $200,000 have entered a positive position
- The 11.5% growth in home equity in Q4 marked the 13th consecutive quarter of double digit gains
Below is a map showing the percentage of homes with a mortgage, in each state, that have positive equity. (The states in gray have insufficient data to report.) Continue reading…
In school we all learned the Theory of Supply and Demand. When the demand for an item is greater than the supply of that item, the price will surely rise.
The National Association of Realtors (NAR) recently reported that the inventory of homes for sale stands at a 4.4-month supply. This is considerably lower than the 6-month inventory necessary for a normal market. Continue reading…
Every homeowner hopes to accomplish five goals when selling their home:
- Sell it for the best price
- Sell it within a predetermined time
- Sell it with the least amount of hassles
- Close on the sale the same day they move into their new home
The fifth reason is the most obvious and the most important:
- They want to make sure it sells.
In order to dramatically increase the chances that the house sells, a homeowner should list with a real estate professional in their market. Why? Because agents have access to the vast majority of the available buyers!!
According to the National Association of Realtors’ (NAR) recently released 2016 Home Buyer and Seller Generational Trends Report, 87% of all buyers purchased their home through a real estate agent or broker. And more that 8 out of 10 buyers in every age group used an agent (see chart below).
If you want your home sold, the best way is to go where the buyers are. The NAR study revealed that the vast majority of purchasers will use an agent when they buy. Meet with a local real estate professional today if you want the best chance of selling.
In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. One major challenge in such a market is the bank appraisal.
If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the price when performing the appraisal for the bank.
Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.
The gap between the homeowner vs. appraiser’s opinion had been heading in the right direction (closer to even), until this past month, when the gap widened again to -1.99%.
Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s meet up so I can guide you through this, and any other, obstacle that may arise.
As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first-time or repeat buyer, you must not be concerned only about price but also about the ‘long term cost’ of the home.
Let us explain.
There are many factors that influence the ‘cost’ of a home. Two of the major ones are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.
What will happen over the next 12 months?
According to CoreLogic’s latest Home Price Index, prices are expected to rise by 5.5% by this time next year.
Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30-year fixed mortgage rate will appreciate to 4.5% in that same time.
What Does This Mean to a Buyer?
Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today: