Do you know the difference?
Homes Continue to Sell Quickly Nationwide
The National Association of Realtors (NAR) recently released their latest Existing Home Sales Report, which revealed that homes were on the market for an average of 47 days in March. This is a decrease from the 59 days reported in February, as well as the 52 days reported back in March 2015.
42% of homes across the country were on the market for less than a month, which is the highest it’s been since July 2015 (43%)!
Among the states with homes selling in 30 days or less are Washington, Oregon, and Minnesota. The map below was created using results from NAR’s Monthly Realtor Confidence Survey.
Buyer demand is increasing as the inventory of homes available for sale remains low. If you are thinking about listing your home for sale this year, meet with a local real estate professional who can help you take advantage of current market conditions!
Housing Inventory Disappearing
The price of any item is determined by the supply of that item, and the market demand. The National Association of Realtors (NAR) recently released their latest Existing Home Sales Report which gives insight into today’s market conditions.
Inventory Levels & Demand
Sales of existing homes rose 5.1% month-over-month in March and are 1.5% higher than this time last year. Sales rose in all four major regions in March.
Total unsold housing inventory is 1.5% lower than March 2015 at a 4.5-month supply and remains well below the six months that is needed for a historically normal market.
Consumer confidence is at the highest level in over a decade. Pair that with interest rates still below 4%, programs available for down payments as low as 3%, and you have an attractive market for buyers.
Homes sold in March were on the market for an average of 47 days and 42% of properties sold in less than a month.
March marked the 49th consecutive month of year-over-year price gains as the median price of existing homes sold rose to $210,700 (up 5.7% from 2015).
So What Does This Mean?
The chart below shows the impact that inventory levels have on home prices.
In a Seller’s Market: Is it Time to Downsize?
A study by Edelman Berland reveals that 33% of homeowners who are contemplating selling their house in the near future are planning to scale down. Let’s look at a few reasons why this might make sense for many homeowners, as the majority of the country is currently experiencing a seller’s market.
In a recent blog, Dave Ramsey, the financial guru, highlighted the advantages of selling your current house and downsizing into a smaller home that better serves your current needs. Ramsey explains three potential financial advantages to downsizing:
- A smaller home means less space, but it also means less time, stress and money spent on upkeep.
- Let’s assume you save $500 a month on your mortgage payment. In 30 years, you could have an additional $1–1.6 million in the bank to get you through your golden years.
- Use the proceeds from selling your current home to pay cash for a smaller one. Just imagine what you could do with no mortgage holding you down! If you can’t pay cash, aim for a 15-year fixed rate mortgage and put at least 10–20% down on your new home. Apply the $500 you saved from downsizing to your new monthly payment. At 3% interest, you could pay off a $200,000 mortgage in less than 10.5 years, saving almost $16,000 in the process.
Realtor.com also addressed downsizing in a recent article. They suggest that you ask yourself some questions before deciding if downsizing is right for you and your family. Here are two of their questions followed by their answers (in italics) and some additional information that could help.
Q: What kind of lifestyle do I want after I downsize?
A: “For some folks, it’s a matter of living a simpler life focused on family. Some might want to cross off travel destinations on their bucket lists. Some might want a low-maintenance community with high-end upgrades and social events. Decide what you want to achieve from your move first, and you’ll be able to better narrow down your housing options.”
Comments: Many homeowners are taking the profit from the sale of their current home and splitting it in order to put down payments on a smaller home in their current location, as well as a vacation/retirement home where they plan to live when they retire.
This allows them to lock in the home price and mortgage interest rate at today’s values. This makes sense financially as both home prices and interest rates are projected to rise.
Q: Have I built up enough equity in my current home to make a profit?
A: “For most homeowners, the answer is yes. This is if they’ve held on to their properties long enough to have positive equity that will be sizable enough to put a large down payment on their next home.”
Comments: A study by Fannie Mae revealed that only 37% of Americans believe that they have significant equity (> 20%) in their current home. In actuality, CoreLogic’s latestEquity Report revealed that 72.6% have greater than 20% equity. That equity could enable you to build the life you’ve always dreamt about.
If you are debating downsizing your home and want to evaluate the options you currently have, meet with a real estate professional in your area who can help guide you through the process.
Sales Up In Nearly Every Price Range
The National Association of Realtors’ most recent Existing Home Sales Report revealed that home sales were up rather dramatically over last year in five of the six price ranges they measure.
Only those homes priced under $100,000 showed a decline (-4.6%). The decline in this price range points to the lower inventory of distressed properties available for sale and speaks to the strength of the market.
Every other category showed a minimum increase of at least 4.6%, with sales in the $250,000- $500,000 range up 15.2%!
Here is the breakdown:
What does that mean to you if you are selling?
Houses are definitely selling. If your house has been on the market for any length of time and has not yet sold, perhaps it is time to sit with your agent and see if it is priced appropriately to compete in today’s market.
Home Prices Are Up…But There is a Challenge
Home values continue to climb and are projected to increase by about 5% over the next twelve months. That is great news for anyone who owns a home. However, it could present a challenge for a family trying to sell their house.
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 sales price when performing the appraisal for the bank.
The National Association of Realtors (NAR) recently released information revealing just how prominent the challenge is in today’s market.
And the challenge is deepening…
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.
As we can see the difference has increased each of the last two months.
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, meet with an experienced professional who can guide you through this, and any other obstacle that may arise.
A ‘Buyer’ in the Hand is Worth Two in the Bush
In today’s highly competitive seller’s market where there are more buyers than there are listings for them to purchase, some sellers may feel like the ball is in their court.
And they would be right when it comes to choosing which offer to accept, the closing date, or even which improvements the seller is willing to make to the home prior to selling.
One thing to remember though is that there is always a line that shouldn’t be crossed.
Interest rates could change, financing might not go through, the appraisal might not come back at the price that you have agreed to. These are all opportunities to work with your buyer to make sure that the sale still happens.
You may think that because buyer demand is high right now, that you could choose to make your buyer jump through hoops. But what happens if they reach their limit and need to walk away? You’re starting over… weeks, maybe months later… and other buyers may wonder what’s wrong with the house that the deal fell through.
The Golden Rule
We were all taught from a young age to “treat others as you would like to be treated”.This shouldn’t change once you have a buyer who seems as though they would do anything to buy your home.
WHAT WAS THE GOOD NEWS IN FEBRUARY?
Sales of houses priced at $1 million or more rose more than 12% in the year 2015 in the Dallas-Fort Worth area, according to the Texas Association of Realtors. The rate of increase in luxury home sales in the D-FW area was about twice the overall growth of preowned home purchases. Last year’s million-dollar-home sales rise in North Texas follows a 15% increase in 2014. The D-FW area had 1,088 luxury home sales during the first 10 months of 2015. The median price of luxury homes sold in North Texas was $1.4 million – the highest of any of the state’s major markets.
New York City and Dallas-Fort Worth were the two fastest growing commercial construction markets in 2015. Among the largest commercial building markets, New York City construction start volumes rose by 66 percent in 2015 from 2014 levels. And in the D-FW area construction of commercial buildings and apartments increased by 35 percent last year from the year before, according to a new report by Dodge Data & Analytics.
D-FW ranked third for total building volume with $6 billion in new project starts, behind New York with $34.9 billion in new construction and Miami at $6.3 billion.
The Mortgage Bankers Association most recently released information showed that the delinquency rate for mortgage loans on one-to-four-unit residential properties dropped to a seasonally adjusted rate of 4.77 percent of all loans. This is the lowest level since the third quarter of 2006.
More than 4,000 jobs were added at Alliance Texas in far north Fort Worth in 2015, bringing the development’s employment numbers above 45,000, a new report shows. Since it started with the opening of Alliance Airport in 1989, Hillwood Properties’ 18,000-acre mixed-used development has generated $59.69 billion in economic impact to North Texas, including $4.32 billion last year, according to an annual report presented to the City Council. 2015 was a big year for Alliance in terms of new projects, including groundbreaking on the $1 billion Facebook data center and Walmart.com’s announcement for another e-commerce center at Alliance Center North II, Hillwood said. Facebook bought 110 acres from Hillwood earlier in 2015. But by mid-December it added another 39 acres for a possible expansion beyond the planned 750,000 square feet of data center space already on the drawing board.
How To Get The Most Money When Selling Your House
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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 maximum value for your house? Here are two keys to ensuring you get the highest price possible.
1. Price it a LITTLE LOW
This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them 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. In that way, the seller will not be fighting with abuyer over the price, but instead will have multiple buyers fighting with each other over the house.
Realtor.com, gives this advice:
“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”
2. Use a Real Estate Professional
This too may seem counter intuitive. The seller may think they would net more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.
Research posted by the Economists’ Outlook Blog revealed that:
“The median selling price for all FSBO homes was $210,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $151,900. However, homes that were sold with the assistance of an agent had a median selling price of $249,000 – nearly $40,000 more for the typical home sale.”
Price your house at or slightly below the current market value and hire a professional. That will guarantee you maximize the price you get for your house.
Home Prices Up 5.76% Across The Country! [INFOGRAPHIC]
Friday March 4th, 2016 For Buyers, For Sellers, Infographics, Pricing
- The Federal Housing Finance Agency (FHFA) recently released their latestQuarterly Home Price Index report.
- In the report, home prices are compared both regionally and by state.
- Based on the latest numbers, waiting to move may end up costing you more!