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Home Prices Are Up….but there is a Challenge

Home Prices Are Up…but there is a Challenge

Appraisal-Challenges-STM

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.

Home Prices Are Up…but there is a Challenge | Simplifying The 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.

Home Prices Are Up…but there is a Challenge | Simplifying The Market

As we can see the difference has increased each of the last two months.

Bottom Line

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.

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Buying a Home is 36% Less Expensive Then Renting Nationwide!

Buying a Home is 36% Less Expensive Than Renting Nationwide!

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In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers actually show that the range is an average of 5% less expensive in Orange County (CA) all the way up to 46% in Houston (TX), and 36% Nationwide!

Other interesting findings in the report include:

  • Interest rates have remained low and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.
  • Some markets may tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
  • Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to discuss the best course of action to get you into your dream home!

Thinking of Selling? The Market Needs Your Listing!

Thinking of Selling? The Market Needs Your Listing!!

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The housing market is really heating up and buyer demand is dramatically increasing as we enter the spring season. However, one challenge to the current market is a major shortage of inventory. Below are a few comments made in the last month by industry experts.

Lawrence Yun, Chief Economist of NAR

“Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau.”

Jonathan Smoke, Chief Economist of Realtor.com

“Low inventories and tight credit will limit the gains we will see in 2016. However, given the level of pent-up demand evident in web activity and stated buyer intentions for 2016, we should see this spring materialize as the busiest season of sales since 2006.”

Rick Sharga, Ten-X’s EVP

“Inventory is too low to support much higher sales. There’s virtually no inventory available at the entry level, and single family housing starts and permits continue to languish at levels far below where they should be at this point of the recovery.”

David Crowe, Chief Economist of the National Assoc. of Home Builders

“Many sellers may not have an absolute decision as to whether to buy an existing home or a new home. So the low inventory of existing homes is locking them in place.”

Freddie Mac

“Challenges remain, with low housing supply and declining affordability being a key concern in many markets.”

Real Estate in 2016 will be the best in a Decade

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A few weeks ago, Jonathan Smoke, the Chief Economist at realtor.com, exclaimed: “All indicators point to this spring being the busiest since 2006.”

Now, Freddie Mac has doubled down on that claim and is saying that 2016 will be the best year that the real estate industry has seen in a decade. In their March Housing Outlook Report, Freddie Mac explained:

“Despite the challenges facing the housing market, we expect this to be the best year for housing in a decade. Home sales, housing starts, and house prices will reach their highest level since 2006 according to our latest forecast…Challenges remain, with low housing supply and declining affordability being a key concern in many markets, but on balance, the housing markets in the U.S. are poised for the best year since 2006.”

The key indicators that have given Freddie Mac such a positive outlook are:

  • Low interest rates
  • A resilient labor market
  • An increase in household formations
  • A projected increase in newly constructed homes

Bottom Line

2016 looks to be shaping up as a great year for residential real estate. Whether you are thinking of buying or selling, now may be the time to sit down with me to discuss the new opportunities that are arising.

Pam Oldaker a Trust Dale Realtor!

Final 2015 Numbers Are In!

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Many have questioned the stability of certain sectors of the U.S. Economy, one section in particular is the housing market. Today we would like to share how the experts feel about how we ended 2015 and where they think we are headed in 2016.

How did we do in 2015?

The National Association of Realtors

“Overall, a resilient U.S. economy and very solid job growth in recent years made 2015 a great rebound year for the housing market.

Existing-home sales were at the highest pace (5.26 million) since 2006 (6.48 million) and the Pending Home Sales Index came in at an average of 108.8, the highest annual reading since…you guessed it: 2006 (111.7).”

The National Association of Home Builders

“With the December report on housing starts and permits, preliminary totals for 2015 are now available. Total housing starts at 1.11 million were up 10.8% in 2015 compared to 2014. Single-family starts were up 10.4% to 715,300. All four census regions also experienced increases in single-family starts for 2015.”

What can we expect to start 2016?

Jonathan Smoke, Realtor.com Chief Economist

“All indicators point to this spring being the busiest since 2006…

Demand for for-sale housing will grow and will continue to be dominated by older millennials, aged 25 to 34. This demographic has the potential to claim a third of home sales in 2016 and represent 2 million home purchases.”

Thinking of Selling? Now May Be the Time!

Thinking of Selling? Why Now May Be The Time | Keeping Current Matters

It is common knowledge that a large number of homes sell during the spring-buying season. For that reason, many homeowners hold off on putting their home on the market until then. The question is whether or not that will be a good strategy this year.

The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring, as compared to the rest of the year? The National Association of Realtors (NAR) recently revealed which months most people listed their home in for 2015. Here is a graphic showing the results:

2015 Popular Selling Months | Keeping Current Matters

The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,860,000.

That number spiked to 2,280,000 by May!

What does this mean to you?

With the national job situation improving, and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring. They are out looking for a home right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition for a buyer.

Bottom Line

It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home today.

Top Reason to List Your Home For Sale Now!

 

Top Reason to List Your House For Sale Now! | Keeping Current Matters

If you are debating listing your house for sale this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes For Sale

The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage:

“While feedback from REALTORS® continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.”

The latest Existing Home Sales Report shows that there is currently a 5.1-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and well below November 2014 numbers.

The chart below details the year-over-year inventory shortages experienced in 2015:

Housing Supply Year-Over-Year | Keeping Current Matters

Anything less than a six-month supply is considered a “Seller’s Market”.

Bottom Line

Call me today or email me, I will be happy to  show you the supply conditions in your neighborhood and assist you in gaining access to the buyers who are ready, willing and able to buy now!

Do you know the difference your interest rate makes?

Do You Know The Difference Your Interest Rate Makes? [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Interest rates have come a long way in the last 30 years.
  • The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford.
  • Experts predict that rates will increase by 3/4 a percent over the next 12 months.
  • Secure a low rate now to get the most house for your money.

Existing Home Sales Up 3.9%

Existing Home Sales Up 3.9% [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • The annual adjusted sales are currently at a 5.36 million pace.
  • 14,684 homes sell every day in the United States.
  • October marked the 44th consecutive month of price gains