A Sign That More Housing Inventory Is Coming

The following article is stat driven and has been the barometer for the housing market climate. If you are the statistical type you will appreciate the info. If you’re not you should read it over. I think you’ll get the point.

Homeowners who have decided to stay put in their current properties may soon be ready for a move, helping to relieve stubbornly tight housing inventory. The evidence is in Fannie Mae’s latest Home Purchase Sentiment Index, in which the number of consumers who say now is a good time to sell a home neared an all-time high. The index—which is a measure of about 1,000 consumers’ attitudes toward housing—rose 1.2 points in August to a reading of 88, reflecting a year-over-year jump of 21 percentage points in the number of consumers who looked favorably on selling. The August reading is just shy of the index’s record high of 88.3, set in July.

Meanwhile, the number of consumers who say now is a good time to buy dropped 5 percentage points in August to a new survey low for the second consecutive month. The number of those who look favorably on buying is down 16 percentage points year over year, Fannie Mae reports.

“In the early stages of the economic expansion, home selling sentiment trailed home buying sentiment by a significant margin. The reverse is true today,” says Fannie Mae chief economist Doug Duncan. “The net ‘good time to sell’ share is now double the net ‘good time to buy’ share, with record-high percentages of consumers citing home prices as the primary reason for both perceptions. Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.”

Here are some additional findings from Fannie Mae’s August sentiment index reading:

  • 36 percent: Consumers who say now is a good time to sell, an uptick of 8 percentage points from July.
  • 18 percent: Consumers who say now is a good time to buy a home, a new survey low.
  • 48 percent: Americans who say home prices will rise, up 1 percentage point month over month.
  • 74 percent: Consumers who say they are not concerned about losing their job, a 1 percentage point drop in August.
  • 16 percent: Americans who say their household income is significantly higher than it was 12 months ago, unchanged from July. Source: Fannie Mae.


Fall May Be Best Time for Buyers to Move

A slower fall season in home buying may help more lingering home buyers to jump in.

Looks like prices are softening a bit. The median price of an existing home dropped for the second month in a row . The price reached $253,500 in August, after soaring to a record high of $263,300 in June, according to the latest data from the National Association of REALTORS®.

Approaching into the fall median sales prices typically decline. Summer is the hottest time of the market both timing wise and weather wise. Families want to be settled in before an upcoming school year. Homes that sell well in the fall tend to be smaller in size for folks with no children and tend to be less expensive.

Existing homes are proving to be a bargain compared to newer homes. The median price of a new home reached $313,700 in July, which is 23.7 percent higher than an existing home. That’s a huge gap.

Mortgage rates are still under the 4 percent psychological threshold, which can be a luring incentive for borrowers. Last week the 30-year fixed rate averaged 3.78 percent, holding steady at a 2017 low.

Studies have shown that fall can be the best time to buy. A recent study found that October was the best month for home buyers. Purchasers in October paid 2.6 percent below the estimated market value at the time for their home, according to the analysis. In other words, buyers interested in a $300,000 home tend to see a $7,800 discount on it in the fall. Oct. 8 was found to have the best day for bargains too, with an average of 10.8 percent below estimated market value, according to the study. This trend has been the same throughout my years of real estate practice. Even during the most recent housing market crisis.

August home sales  started to decline heading into the fall season. Sales of existing homes fell 1.7 percent from July to August, but the National Association of Realtors (NAR) mostly blamed the decrease on the limited number of listings for sale on the market. Again this is another example of what happens every August. No new news to me nor my colleagues.

With less inventory properties are staying on the market for less time, so buyers will need to be ready to act fast. Fifty-one percent of homes sold in August were on the market for less than a month, according to National Association of Realtors (NAR). Properties typically stayed on the market for just 30 days in August.

Happy house hunting.


7 Pricing Myths to Stop Believing If You Ever Hope to Sell Your House

I was a bit reluctant to weigh in on this so very important topic regarding Sellers that have preconceived notions as to what their home is worth.  It seems as though it’s a common feeling that most all Sellers cling to regardless of a Realtor’s Market Analysis or an Appraiser’s Analysis. I believe that all real estate agents and experienced sellers included would agree with me on that. The following article discusses 7 myths / mistakes that Seller’s buy into.

Pricing your own home is hard, what with all the history and hopes this magic number entails. Of course, you want to make a profit. Of course, all that money you spent installing a swimming pool or a half-bath will be recouped, because you’re leaving your digs in better shape than when you bought it, right? Right?

Well, not necessarily. Too many home sellers fall prey to myths about home pricing that seem to make sense at first, but don’t jibe with the reality of real estate markets today. To make sure you haven’t bought into any of this malarkey—since the buyers you’re trying to woo sure haven’t—here are some common pricing myths you’ll want to rinse from your brain so you kick off your home-selling venture with realistic expectations. It’s time to get real, folks!

1. You always make money when you sell a home

Sure, real estate tends to appreciate over time: The National Association of Realtors® estimates that home prices will jump by 5% by the end of 2017 and continue rising 3.5% in 2018. But selling your home for more than you paid is by no means a given, and your return on investment can vary greatly based on where you live.

The National Association Of Realtors (NAR) also found, for instance, that the cost of single-family homes increased in about 87% of the metros it studied, but prices actually dropped in 23 markets. So don’t assume you’ll walk away with a profit until you’ve examined what’s up in your area first.

2. Price your house high to make big bucks

We know what you’re thinking: “Hey, it’s worth a shot!” But if you start with some sky-high asking price, you’ll soon come back to Earth when you realize that an overpriced home just won’t sell.

“While the payday might sound appealing, you’re actually sacrificing your best marketing time in exchange for the remote possibility that someone will overpay for your home,” says Kathleen Marks, a Realtor.

While certain buyers might be suckered in, this becomes far less likely if they’re working with a buyer agent’s who will know all too well when a home is overpriced, and advise their client to steer clear. And this can lead to problems down the road (as our next myth indicates).

3. If your home’s overpriced, it’s no big deal to lower it later

Sorry, but overpricing your home isn’t easily fixed just by lowering it later on. The reason: Homes that have lingered on the market for months—or that have undergone one or more price reductions—make buyers presume that something must be wrong with it. As such, they might still steer clear, or offer even less than the price you’re now asking.

Bottom line: “Price your home appropriately from the beginning for your best shot at having a quick and easy sale,” Marks recommends.

4. Pricing your home low means you won’t make as much money

Similarly, sellers are often leery of pricing their home on the low end. But as counter-intuitive as this seems, this strategy can often pay off big-time. Here’s why: Low-priced homes drum up tons of interest, which could result in bidding war that could drive your home’s price past your wildest dreams.

5. You can add the cost of any renovations you’ve made

Let’s say you overhauled your kitchen or added a deck. It stands to reason that whatever money you paid for these improvements will be recouped in full once you sell—after all, your home’s new owners are inheriting all your hard work.

The reality: While your renovations might see some return on investment, you’ll rarely recoup the whole amount. On average, you can expect to get back 64% of every dollar you spend on home improvements. Plus that profit can vary greatly based on which renovation you do.

Check out this list of common renovations and their return on investment to know what you can actually expect.

6. A past appraisal will help you pinpoint the right price

If you have an appraisal in hand, from when you bought or refinanced your house, you might think that’s a logical place to start to price your home. It’s not!

An appraisal assigns your home a value based on market conditions at a specific date, so it becomes old news very quickly. In fact, lenders typically won’t accept appraisals that are more than 60 days old.

“Since lenders know markets can change in six months’ time, it’s important for sellers to understand that a previous appraisal is never a reliable source for the current value of a home,” Marks says.

7. Your agent might overprice the house to make a bigger commission

Don’t even go there, says Realtor Raena Janes.

“While it’s true that an agent’s commission  is based on the selling price of a house, the disparity will end up being negligible,” she says. For example, the difference in commission between a $300,000 house and one that’s $310,000 is about $150.

“No real estate agent is going to lose a sale for the sake of a couple hundred dollars,” she explains.

From me. My purpose to share this blog with sellers is not to be condescending nor challenge their intelligence but rather to educate and prepare them for a less hassle free and successful Closed Escrow.  When it’s time to list your home good luck and happy real estate days ahead to you.




Mortgage Rates Strike New 2017 Low

For the third consecutive week, the 30-year fixed-rate mortgage averaged a new year-to-date low.

“The 10-year Treasury yield fell 9 basis points this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate followed, dropping 4 basis points to a year-to-date low of 3.78 percent.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 7:

  • 30-year fixed-rate mortgages: averaged 3.78 percent, with an average 0.5 point, falling from last week’s previous yearly low of 3.82 percent. Last year at this time, 30-year rates averaged 3.44 percent.
  • 15-year fixed-rate mortgages: averaged 3.08 percent, with an average 0.5 point, falling from last week’s 3.12 percent average. A year ago, 15-year rates averaged 2.76 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.15 percent, with an average 0.4 point, rising from last week’s 3.14 percent average. A year ago, 5-year ARMs averaged 2.81 percent.

I get calls often or I’ll get cornered at a public event or party with the same questions from people. How is the real estate market and what are the interest rates for loans? Easy to answer given the fact real estate professionals see the rates daily. Also they can provide interest rate trends and stats like the information mentioned above. One can see the current rates and track the direction the rates are heading. According to the stats interest rates slightly dropped to a years low but are higher than a year ago.

Will they continue to drop or will they rise depends on the the Federal Government.  Modern date rates, as a result of the recent housing market crash,  have ranged from as low as 2.5% to 4.5%. It doesn’t get much better than that. Many of you readers remember 13.5% in the days of the Ronald Regan Presidency.


What ‘Great Bones’ Really Means

“This house has “Great Bones.” As a real estate professional, you’ve heard the phrase countless times. You’ve probably even uttered it more than once. But what do we really mean when we say a house has Great Bones?

It’s a feature that all buyers want, but few can define and real estate Agents seem to be in disagreement with what the feature means to them. Understanding how to identify qualities that add up to the coveted “Great Bones” feeling can help you set your listing apart.  Recently, Architectural Digest’s Lindsey Mather asked a handful of designers to get specific about the qualities that give a home this elusive quality.  Here are a few distinct items they look for although I’ve given my interpretation of what “Great Bones” means to me following these three features.

Good flow: Check how it feels to simply walk through the home. Do the rooms make sense next to each other, or do they seem choppy or lopsided? Alabama decorator William McLure says architects and designers often rely on symmetry and mirrored design elements to offer a feeling of balance to residential spaces. “It makes the layout of the house not look like an afterthought,” he says. “You want rooms that look well planned and that structurally make sense.”

All the little things: Here’s where your macro lens comes in handy: The intricate details and architectural features that make a listing stand out in the eyes of buyers are often too small to see in a wide-angle property tour photo. Fancy plaster, original fireplaces, bespoke ceiling beams, thick moldings, and vintage lighting and hardware are all worth the time to fawn over in your listing descriptions. Also, any windows that are out-of-the ordinary can really help a place stand out as different.

Plenty of headroom: Sometime we use “Great Bones” to refer to elements that are hard to change, according to New York–based interior designer Alyssa Kapito. “A room or a house with “Great Bones” for us has high ceilings, tall windows, and is generally well proportioned,” she says. “Everything decorative can be rather easily switched, but it’s quite difficult and expensive to get those three items on your checklist if they aren’t already there.” Make sure you check for drop ceilings, though. “Great Bones” sometimes hide under tiles and panels.

“Great Bones” means none of the things referenced above to me. Really ? Do these features strike you as “Great Bones”? “Great Bones” to me refers to the quality of construction materials and structural elements of the home that are not necessarily visible….much like the bones in our body providing good foundation, but not necessarily seen. Some examples are 2×4 vs. 2×6 framing stick built, high grade lumber, steel framing, re-bar in slab foundations, earthquake strapping, limit prefab roofing material and reinforce those materials, 50 year comp roof or life time tile, plaster rather than drywall, etc. Simply stated…It’s about quality construction and quality materials that define the terminology “Great Bones”.. Simply stated…It’s about quality construction and quality materials that define the terminology “Great Bones”.