“Continued interest in rental apartments and slowing construction keeps the national average rent on a strong upward trend.”Zillow, in its latest Rent Index, agreed that rents are continuing on an “upward trend” across most of the country, and that the trend is accelerating:
“The median U.S. rent grew 2% year-over-year, to $1,595 per month. National rent growth is faster than a year ago, and while 46 of the 50 largest markets are showing deceleration in annual home value growth, annual rent growth is accelerating in 41 of the largest 50 markets.”The Zillow report went on to detail rent increases since the beginning of the housing market recovery in 2012. Here is a graph showing the increases:
Bottom LineIf you think home prices have skyrocketed, look at rents. It is true that home prices have risen over the past seven years, increasing the cost of owning a home. However, the cost of renting a home has also increased over that same time period. Owning a home is much better than renting as you will build significant equity over the years. Want help finding your home to purchase? Give me a call! You'll be glad you did!
Buyer DemandThe map below was created after asking the question: “How would you rate buyer traffic in your area?”The darker the blue, the stronger the demand for homes is in that area. The survey shows that in 3 of the 50 U.S. states, buyer demand is now very strong; only 2 of the 50 states have a ‘weak’ demand. Overall, buyer demand is slightly lower than this time last year but remains strong.
Home SupplyThe index also asked: “How would you rate seller traffic in your area?”As the map below shows, 18 states reported ‘weak’ seller traffic, 29 states and Washington, D.C. reported ‘stable’ seller traffic, and 3 states reported ‘strong’ seller traffic. This means there are fewer homes for sale than what is needed to satisfy the buyers looking for homes.
Bottom LineLooking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet buyer demand, prices will continue to increase. If you are debating listing your home, let’s get together to capitalize on the demand in our market now.
Is Your House Priced to Sell? Immediately?In today’s real estate market, more houses are coming to market every day. Eager buyers are searching for their dream homes, so setting the right price for your house is one of the most important things you can do. According to CoreLogic’s latest Home Price Index, home values have risen at over 6% a year over the past two years, but have started to slow to 3.6% over the last 12 months. By this time next year, CoreLogic predicts home values will be 5.4% higher.
With prices slowing from their previous pace, homeowners must realize that pricing their homes a little over market value to leave room for negotiation will actually dramatically decrease the number of buyers who will see their listing (see the chart below).Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price their house so the demand for the home is maximized. By doing so, the seller will not be negotiating with one buyer over the price, but will instead hopefully have multiple buyers competing with each other over the house.The secret is making sure your house is Priced To Sell Immediately (PTSI). That way, your home will be seen by the most potential buyers. It will sell at a great price before more competition comes to the market.
Bottom LineIf you’re debating listing your house for sale, let’s get together to discuss how to price your home appropriately and maximize your exposure.
Bottom LineThose waiting for prices to fall before purchasing a home should realize that the probability of that happening anytime soon is very low. With mortgage rates already at near historic lows, now may be the time to act.
1. Move-Up OpportunityWith the rise in prices, homeowners naturally experience an increase in home equity. According to the Homeowner Equity Insights from CoreLogic,
“In the first quarter of 2019, the average homeowner gained approximately $6,400 in equity during the past year.”This increase in profit means if homeowners decide to sell, they’ll be able to put their equity to work for them as they make plans to move up into their next home.
2. Gain in Seller’s ProfitATTOM Data Solutions recently released their Q2 2019 Home Sales Report, indicating the seller’s profit jumped at one of the fastest rates since 2015. They said:
“A look at the national numbers showed that U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since the original purchase of $67,500…the average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of the original purchase price.”Looking at the amount paid when they bought their homes, and then the amount they received after selling, we can see that some homeowners were able to walk away with a significant gain.
3. Out of a Negative Equity SituationNegative equity occurs when there is a decline in home value, an increase in mortgage debt, or both. Many families experienced these challenges over the last decade. According to the same report from CoreLogic,
“U.S. homeowners with mortgages (roughly 63% of all properties) have seen their equity increase by a total of nearly $485.7 billion since the first quarter 2018, an increase of 5.6%, year over year. In the first quarter of 2019, the total number of mortgaged residential properties with negative equity decreased…to 2.2 million homes, or 4.1% of all mortgaged properties.”The good news is, many families have moved beyond a negative equity situation, and no longer owe more on their mortgage than the value of their home.