WHAT TO CONSIDER WHEN SELLING YOUR HOUSE
- Demand Is Strong
The latest Buyer Traffic Report from the National Association of Realtors (NAR) highlights strong buyer demand across most of the country. Buyers are actively searching, ready, and financially prepared to purchase, creating a competitive housing market where multiple buyers often vie for the same home.
Now is the perfect time to take advantage of this active buyer market and make your move!
- There Is Less Competition Now
Housing inventory remains below the six-month supply needed for a balanced market, meaning demand continues to outpace available homes in most areas. For homeowners, this is an advantage, as rising home values have led to increased equity. However, more listings may enter the market soon.
Historically, homeowners moved every six years, but since 2011, that number has stretched to nine or ten years. Many homeowners have been eager to sell but were previously unable due to negative equity. As home values continue to rise, more sellers will finally have the opportunity to make a move.
With additional inventory expected, buyer options will expand—but if you’re considering selling, don’t wait until the market shifts. Take advantage of current conditions while demand remains strong!
- A Faster Selling Process
Today’s competitive housing market has motivated buyers to take extra steps to stand out, such as getting pre-approved for mortgage financing before house hunting. This streamlines the selling process, making transactions quicker and easier, as buyers already know their budget. According to Ellie Mae’s latest Origination Insights Report, the average time to close a loan is 47 days, ensuring a relatively swift timeline for sellers.
- The Best Time to Move Up
If you’re considering upgrading to a premium or luxury home, now is the ideal time! With high-end home inventories increasing, these markets have shifted into a buyer’s market, meaning more options and potential negotiating power for buyers.
At the same time, starter and trade-up homes are in high demand, meaning your current home is likely to sell quickly, putting you in a strong position to find and purchase your dream home.
Additionally, home prices are projected to rise by 4.3% over the next year, according to CoreLogic. Waiting could mean higher costs, both in down payments and monthly mortgage payments, so making the move sooner rather than later could save you money.
- It's Time to Take Control
Think back to why you decided to sell—does waiting align with your goals? Consider what truly matters:
Is financial gain more important than spending time with family?
Is holding onto your home worth more than prioritizing your health and well-being?
Is delaying your sale preventing you from living the life you envision?
Only you can answer these questions. If selling aligns with your future aspirations, now is the time to take action and move forward with confidence.
That is what is truly important.
The housing crisis is finally behind us, and the real estate market is making strides toward full recovery. Home values and sales are up, while distressed sales—including foreclosures and short sales—have dropped to their lowest levels in years. The outlook for continued market growth remains positive.
However, one challenge could slow this momentum: a lack of housing inventory. While buyer demand is expected to stay strong, the supply of available homes is struggling to keep pace.
Expert Insights
Lawrence Yun, Chief Economist at the National Association of Realtors: "A majority of the country saw an upswing in buyer interest at the end of last year, which ultimately put even more strain on inventory levels and prices… These consistent, multi-year price gains have been great news for homeowners, especially for those who were previously in a negative equity situation."
Dr. Frank Nothaft, Chief Economist for CoreLogic: "The number of homes for sale has remained very low. Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence have increased the number of prospective homebuyers. The result of growing demand and limited inventory is continued appreciation in home prices."
Bill Banfield, Quicken Loans Executive VP of Capital Markets: "Low housing inventory, coupled with a strong economy, has led to steady increases in home values, as shown by the annual rise in the Home Value Index (HVI). Recent interest rate hikes may challenge affordability in the short term, but the strong demand for homeownership could help stabilize inventory issues."
Bottom Line
If you're considering selling, now may be the perfect time. Demand for homes remains high, and with limited inventory, competition is low. This could lead to a quick sale at an excellent price.
Buyer Demand Continues to Outpace Inventory of Homes For Sale
The price of any item, including real estate, is influenced by supply and demand. The National Association of Realtors (NAR) conducts an extensive survey, gathering insights from over 50,000 real estate practitioners to gauge expectations for home sales, pricing trends, and overall market conditions in their Realtors' Confidence Index.The latest report highlights the dynamic relationship between Seller Traffic (supply) and Buyer Traffic (demand), providing a clearer picture of current market conditions. Understanding this balance is crucial for buyers and sellers alike, as it impacts pricing, competition, and overall transaction speed in the housing market.
Buyer Demand
This map was created after asking the question:
“How would you rate buyer traffic in your area?”
The darker the blue, the more buyers are looking for homes in that area. Only two states came with a weak demand level.
Seller Supply
The Index also surveyed respondents on seller traffic by asking: "How would you rate seller traffic in your area?"
Bottom Line
The maps clearly illustrate why home prices continue to rise across many regions. With strong buyer demand and limited housing inventory, competition remains high, driving prices upward. Until more homes enter the market to balance supply and demand, this trend is likely to continue.
Home Prices Over The Last Year
Every quarter, the Federal Housing Finance Agency (FHFA) reports on the year-over-year changes i home prices. Below, you will see that prices are up year-over-year in every region.
Looking at the breakdown by state, you can see that each state is appreciating at a different rate. This is important to know if you are planning on relocating to a different area of the country. Waiting to move may end up costing you more!
There are many unsubstantiated theories as to why home values are continuing to increase. From those who are worried that lending standards are again becoming too lenient (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 more than seven months will cause prices to depreciate (see chart 1).
According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes has been below six months for the last five years (see chart 2).
Bottom Line
If buyer demand outpaces 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.
CoreLogic’s latest Equity Report revealed that “over the past 12 months, 712,000 borrowers moved into positive equity.” This is great news, as the share of homeowners with negative equity (those who owe more than their home is worth) has dropped more than 20% since the peak in Q4 of 2009 (26%) to 4.9% today.
The report also revealed:
The average homeowner gained approximately $14,900 in equity during the past year.
Compared to Q3 2016, negative equity decreased 22% from 3.2 million homes, or 6.3% of all mortgaged properties.
U.S. homeowners with mortgages (roughly 63% of all homeowners) have seen their equity increase by a total of $870.6 billion since Q3 2016, an increase of 11.8%, year-over-year.
The map below shows the percentage of homes by state with a mortgage and positive equity. (The states in gray have insufficient data to report.)
Significant Equity Is on The Rise
Frank Nothaft, Chief Economist at CoreLogic, believes this is great news for the “housing market.” He went on to say:
“Homeowner equity increased by almost $871 billion over the last 12 months, the largest increase in more than three years. This increase is primarily a reflection of rising home prices, which drive home values, leading to an increase in home equity positions and supporting consumer spending.”
Of the 95.1% of homeowners with positive equity in the U.S., 82.9% have significant equity (defined as more than 20%). This means that more than three out of four homeowners with a mortgage could use he equity in their current home to purchase a new home now.
The map below shows the percentage of homes by state with a mortgage and significant equity.
Bottom Line
If you are one of the many homeowners who are unsure of how much equity you have in your home and are curious about your ability to move, let’s meet up to evaluate your situation.
Every month, CoreLogic releases its Home Price Insights Report. In that report, they forecast where they believe residential real estate prices will be
In twelve months.
Below is a map, broken down by state, reflecting how home values are forecasted to
change by the end of 2018 using data from the most recent report.
As we can see, CoreLogic projects an increase in home values in all 50 states, including Washington, DC, and
They see home prices increasing by 4.3% nationwide.
How might the new tax code impact these numbers?
Recently, the National Association of Realtors (NAR) conducted its own analysis to determine the impact the new tax code may have on home values. NAR’s analysis:
“…estimated how home prices will change in the upcoming year for each state,
considering the impact of the new tax law and the momentum of jobs and
housing inventory.”
Here is a map based on NAR’s analysis:
According to NAR, the new tax code will have an impact on home values across the
country. However, the effect will be much less significant than what some originally
thought.
Where Are Interest Rates Headed?
The interest rate you pay on your home mortgage has a direct impact on your monthly payment. The higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.
Below is a chart created using Freddie Mac’s U.S. Economic & Housing Market Outlook. As you can see, interest rates are projected to increase steadily over the next 12 months.
How Will This Impact Your Mortgage Payment?
Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly.
According to CoreLogic’s latest Home Price Index, national home prices have appreciated 6.6% from his time last year and are predicted to be 4.3% higher next year.
If both the predictions of home price and interest rate increases become reality, families would wind up paying considerably more for their next home.
Bottom Line
Even a small increase in interest rate can impact your family’s wealth. Let’s get together to evaluate your ability to purchase your dream home.
According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year fixed-rate mortgage hovered around 4% in 2017 and are still near record lows.
The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.
Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget.
This chart shows the impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments between $1,850-$1,900 a month. With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.
Act now to get the most house for your hard-earned money.
The Role Access Plays In Getting Your House Sold!
So you’ve decided to sell your house. You’ve hired a real estate professional to help you with the entire process, and they have asked you what level of access you want to provide to potential buyers.
There are four elements to a quality listing. At the top of the list is Access, followed by Condition, Financing ,and Price. There are many levels of access that you could provide to your agent to be able to show your home.
Here are five levels of access that you could provide to a buyer with a brief description:
Lockbox on the Door – This allows buyers the ability to see the home as soon as they are aware of the listing, or at their convenience.
Providing a Key to the Home – Although the buyer’s agent may need to stop by an office to pick up the key, there is little delay in being able to show the home.
Open Access with a Phone Call – The seller allows showing with just a phone call’s notice.
By Appointment Only (example: 448-HourNotice) – Many out-of-town/state buyers and relocation buyers visit an area they would like to move to and only have the weekend to view homes. They may not be able to plan that far in advance, or may be unable to wait the 48 hours o be shown the house.
Limited Access (example: the home is only available on Mondays or Tuesdays at 2 pm or for only a couple of hours a day) – This is the most difficult way to be able to show your house to otential buyers.
In a competitive marketplace, access can make or break your ability to get the price you are looking for, or even sell your house at all.
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 ensure that 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 doing this, the seller will not be fighting with a buyer over the price, but instead will have multiple buyers fighting with each other over the house.
Realtor.com gave 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 slightly underpriced property, especially in areas with low inventory.”
2. Use a Real Estate Professional
This, too, may seem counterintuitive. The seller may think they would make more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes ypically sell for more money when handled by a real estate professional.
A study by Collateral Analytics reveals that FSBOs don’t actually save any money, and in some cases y be costing themselves more by not listing with an agent.
In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”
The results of the study showed that the differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price was nearly 6% lower for FSBO sales of similar properties.
Bottom Line
Price your house at or slightly below the current market value and hire a professional. That will guarantee that you maximize the price you get for your house.
When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.
In order to accomplish all three goals, a seller should realize the importance of using a real estate ofessional. We realize that technology has changed the purchaser’s behavior during the homhome uyingocess. According to the National Association of Realtors’ latest Profile of Home Buyers & Sellers, the percentage of buyers who used the internet in their home search increased to 95%.
However, the report also revealed that 95% of buyers who used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.
Buyers search for a home online, but then depend on an agent to find the home they will buy (52%), to negotiate the terms of the sale (47%) and price (38%), or to help understand the process (60%).
The plethora of information now available has resulted in an increase in the percentage of buyers who reach out to real estate professionals to “connect the dots.” This is obvious as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.
Bottom Line
If you are thinking of selling your home, don’t underestimate the role that a real estate professional can play in the process.
Two Things You Don’t Need To Hear From Your Listing Agent
You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:
Set the market value on possibly the largest asset your family owns (your home)
Set the time schedule for the successful liquidation of that asset
Set the fee for the services required to liquidate that asset
An agent must be concerned first and foremost with you and your family in order to garner that degree of trust. Make sure this is the case.
Be careful if the agent you are interviewing begins the interview by:
Bragging about their success
Bragging about their company’s success
An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of your house. However, you first need to know that they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much
less important.
Look for someone with the ‘heart of a teacher’ who comes in prepared to explain the current real estate market to you, and is patient enough to take the time to show you how it may impact the sale of your home; not someone only interested in trying to sell you on how great they are.
You have many agents from which to choose. Pick someone who truly cares.
In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 4.5 %+ over the next twelve months. One major challenge in such a market is the bank appraisal.
If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that recently closed) to defend the selling price when performing the appraisal for the bank.
Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the disparity between what a homeowner who is seeking to refinance their home believes their house is worth, nd an appraiser’s evaluation of that same home.
Bill Banfield, Executive VP of Capital Markets at Quicken Loans, urges anyone looking to buy or sell in today’s market to remember the impact of this challenge:
“The appraisal is one of the most important pieces of data in the mortgage process. Often, the entire transaction hinges on the appraisal showing a number similar to what the homeowner estimated at the beginning of the process.
If the appraisal is lower, it could mean the homeowner needs to bring additional cash to close, or the loan may need to be reworked. It’s very promising to see the homeowner estimate and the appraiser's opinion so close together.”
The chart below illustrates the changes in home price estimates over the last 12 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 get together to discuss this and any other obstacles that may arise.
In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale By Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.
Here are the top five reasons:
- Exposure to Prospective Purchasers
Recent studies have shown that 95% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
- Results Come from the Internet
Where did buyers find the home they actually purchased?
- 49% on the internet
- 31% from a Real Estate Agent
- 7% from a yard sign
- 1% from newspapers
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
- There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:
- The buyer who wants the best deal possible
- The buyer’s agent who solely represents the best interest 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 appraiser will address questions of value.
- FSBOing Has Become More and More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosure and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
- You Net More Money When Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is that they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything, and in some cases, may be costing themselves more by not listing with an agent. One of the main reasons for the price difference at the time of sale is:
Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”
If more buyers see a home, the greater the chances are that there could be a bidding war for the property. The study showed that the difference in price between comparable homes of size and location is currently at an average of 6%.
Why would you choose to list on your own and manage the entire transaction when you can hire an agent and not have to pay anything more?
Bottom Line
Before you decide to take on the challenges of selling your house on your own, let’s get together and discuss your needs.
CONTACT ME TO TALK MORE
I’m sure you have questions and concerns…
I would love to talk with you more about what you read here and help you on the path to selling your house. My contact information is below. I look forward to hearing from you…
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