According to a recent report by ATTOM Data Solutions, home sellers who sold their homes in the third quarter of 2018 benefited from rising home prices and netted an average of $61,232. This is the highest average price gain since the second quarter of 2007 and represents a 32% return on the original purchase prices. After the Great Recession, many homeowners were left in negative equity situations but home price appreciation in the recovery period since then has given homeowners something to smile about. The results from ATTOM fall right in line with data from the latest edition of the National Association of Realtors’ (NAR) Profile of Home Buyers and Sellers. Below is a chart that was created using NAR’s data to show the percentage of equity that homeowners earned at the time of sale based on when they purchased their homes. Even though those who purchased at the peak of the market netted less than those who bought before and after the peak, the good news is that there was a double-digit profit to be had! Many homeowners believe that they are still underwater which has led many of them to not even consider selling their houses.
Bottom LineIf you are curious about how much equity you’d earn if you sold your home, let’s get together to perform an equity review and determine the demand for your home in today’s market!
Over the past few years, two trends have emerged in the housing market:
- Home renovations have shot up
- Inventory of homes available for sale on the market has dropped
“Given a choice between spending a fixed amount of money on a down payment for a new home or fixing up their current home, what would you do?”Seventy-six percent of those surveyed said that they would rather renovate their current homes than move. The results are broken down by generation below. More and more studies are coming out about the intention that many Americans have to ‘age in place’ (or retire in the area in which they live). Among retirees, 91% would prefer to renovate than spend their available funds on a down payment on a new home. If their current house fits their needs as far as space and accessibility are concerned, then a renovation could make sense. But if renovations will end up changing the identity of the home and impacting resale value, then the renovations may end up costing them more in the long run. With home prices increasing steadily for the last 6.5 years, homeowners have naturally gained equity that they may not even be aware of. Listing your house for sale in this low-competition environment could net you more money than your renovations otherwise would.
Bottom LineIf you are one of the many homeowners who is thinking about remodeling instead of selling, let’s get together to help you make the right decision for you based on the demand for your house in today’s market.
One hundred years ago, on the eleventh hour of the eleventh day of the eleventh month, we marked the end of the “war to end all wars.” That day, which was to be observed annually on the eleventh day of the eleventh month, became known as Armistice Day and then, later on, became Veterans Day. But Veterans Day is not for veterans. They don’t serve for thanks or recognition. Veterans Day sets aside a day for those of us who haven’t worn the uniform to acknowledge those who have.
So today, we honor and remember.If you ask a military family, ANY military family, how you can help them, they will respond without hesitation, “Make sure my service member is taken care of.” If you ask a service member, ANY service member, how you can best honor them, they will respond without hesitation, “Take care of my family.” Don’t know anyone who has served or is serving? More than likely, there are veterans in your midst. Each year, 260,000 military personnel relocate to new communities, and another 230,000 transition out of the military. In total, there are 22 million veterans among us in the world. For those who relocate through a Permanent Change of Station (or PCS), it can be a pretty stressful time. There isn’t a lot of time to find a new place to live and the timeline is more accelerated for finding a place to call home. MILLIE is an online community and digital marketplace that connects members of the military and their families with specialized knowledge and trusted resource providers to alleviate the stress of PCSing. According to MILLIE, “70% of active duty families live off the installation and in the surrounding communities.” Wondering what you can do to help make a recently PCSed family feel welcome? A recent survey of military families revealed that,
“When respondents described the support they most appreciate, family, friends, and faith-based communities rose to the top. When they described the support they needed, they called for more networking, communication, and support groups. Families said that when leaving service, they feel as though they do not fit into the civilian world. Forging partnerships between military and civilian support systems will encourage pathways of understanding.”If you find out that your new neighbor may have been PCSed, make an effort to share what you know about your community, from the best pizza place to where you can get your oil changed. If you know that the service member of the family is actively deployed, helping out with tasks like mowing the lawn or bringing over a home-cooked meal are small gestures that will go a long way towards welcoming this family into their new home.
Bottom LineToday, we honor and remember those who have served for our country. Everyone always asks what they can do to help, sometimes the simplest answer is the best one.
More about MILLIE:MILLIE is an online community and digital marketplace that connects members of the military and their families with specialized knowledge and trusted resource providers to alleviate the stress of PCS’ing. Check out MILLIE’s Installation Guides, their network of Veteran and military spouse real estate agents, and MILLIE Scouts, their on-demand task service comprised of military spouses.
According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the inventory of homes for sale this year compared to last year has increased for the last four months, all while sales of existing homes have slowed compared to last year’s numbers. For over three years leading up to this point, the exact opposite was true; Inventory dropped as sales soared. NAR’s Chief Economist Lawrence Yun shed some light on what could be contributing to this shift,
“This is the lowest existing home sales level since November 2015. A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”
Let’s take a deeper look:
Interest RatesSince January, 30-year fixed mortgage interest rates have increased nearly a full percentage point (from 3.95% to 4.9%). Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association are all in agreement that rates will continue to increase to about 5.2% over the next 12 months.
“The rise in [mortgage] rates paired with this very strong price appreciation absolutely is slowing housing,” said Fannie Mae’s Chief Economist Doug Duncan.Even though rates are higher than they’ve been in a decade, they still remain below the average for the 1970s, 80s, 90s, and 2000s!
Mismatch of InventoryElizabeth Mendenhall, President of NAR, said it best, “Despite small month over month increases, the share of first-time buyers in the market continues to underwhelm because there are simply not enough listings in their price range.” Prices of starter and trade-up homes have appreciated faster than their higher-priced counterparts. Over the last 5 years, the lowest-priced homes have appreciated by 47% while the highest-priced homes have appreciated by only 24%. According to the Institute of Luxury Home Market’s Luxury Market Report, the $1M-and-up price range is now experiencing a buyer’s market. This means that supply (inventory) has finally caught up with demand and buyers are in the driver’s seat when it comes to negotiations. Additionally, many listings in this price range have experienced price cuts in order to entice buyers to put in offers.
Natural DisastersAlthough not fully to blame for the national shortage in sales and inventory, natural disasters like Hurricane Florence, Hurricane Michael, and the wildfires on the West Coast have certainly had an impact.
Bottom LineAdditional inventory coming to market could help normalize the housing market and allow incomes to catch up to home prices. For more information about sales and inventory in your area, let’s get together so we can help you make the best decision for you and your family. Call or text me today! P.S. See a list of Nassau County and Suffolk County towns as inventory has changed from December 2017 to December 2018, Not every town has seen an increase - Click here.
There are many questions about where home sales are headed in 2019. We have gathered the most reliable sources to help answer this question. Here are our sources: Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments. The National Association of Realtors (NAR) – The largest association of real estate professionals in the world. Freddie Mac – An organization which provides liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast. Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets.
Here are their projections:
Bottom LineEvery source sees home sales increasing next year. Let’s get together to chat about what’s going on in your neighborhood. Feel free to give me a call!
With home prices on the rise and buyer demand still strong, some sellers may be tempted to try and sell their homes on their own without using the services of a real estate professional. Real estate agents are trained and experienced in negotiation and, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.
Here is a list of just some of the people with whom the seller must be prepared to negotiate with if they decide to For Sale by Owner (FSBO):
- The buyer who wants the best deal possible
- The buyer’s agent who solely represents the best interests of the buyer
- The buyer’s attorney (in some parts of the country)
- The home inspection companies, which work for the buyer and will almost always find some problems with the house
- The termite company if there are challenges
- The buyer’s lender if the structure of the mortgage requires the sellers’ participation
- The appraiser if there is a question of value
- The title company if there are challenges with certificates of occupancy (CO) or other permits
- The town or municipality if you need to get the CO permits mentioned above
- The buyer’s buyer in case there are challenges with the house your buyer is selling
Bottom LineThe percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Let’s get together to discuss all that we can do to make the process easier for you. Give me a call - today!
There are many questions about where home prices will be next year as well as where they may be headed over the next several years to come. We have gathered the most reliable sources to help answer these questions: The Home Price Expectation Survey – A survey of over 100 market analysts, real estate experts, and economists conducted by Pulsenomics each quarter. Zelman & Associates – The firm leverages unparalleled housing market expertise, extensive surveys of industry executives, and rigorous financial analysis to deliver proprietary research and advice to leading global institutional investors and senior-level company executives. Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments. Freddie Mac – An organization whose mission is to provide liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast. The National Association of Realtors (NAR) – The largest association of real estate professionals in the world. Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets always.
Here are their projections of prices going forward:
Bottom LineEvery source sees home prices continuing to appreciate – just at lower percentages as we move through the next several years.
There are many unsubstantiated theories about what is happening with home prices. From those who are worried that prices are falling (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion. However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase. It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything greater than seven months will cause prices to depreciate (see chart below). According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below).
Bottom LineIf buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.
- When listing your house for sale, your top goal will be to get the home sold for the best price possible!
- There are many small projects that you can do to ensure this happens!
- Your real estate agent will have a list of specific suggestions for getting your house ready for market and is a great resource for finding local contractors who can help!