Buyer and seller attitudes about real estate market

Economists are officially pessimistic about the housing market.  This is the general sentiment following another month of declining home sales.  Experts are pointing to a number of factors for the slowdown, including increased interest rates and housing affordability.  But what are home buyer and seller attitudes about real estate? The National Association of Realtors’ most recent Housing Opportunities and Market Experience survey hints at a busy spring!

Economic attitudes about real estate market

attitudes about real estate
Attitudes about real estate market (infographic from nar.realtor)

An October 19th NAR news release (nar.realtor) reported that September’s home sales were the weakest in several years.  The nationwide trend affected all regions.  NAR chief economist Lawrence Yun stated:

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.”

First-time-home-buyers are finding the housing market increasingly challenging.  This segment’s participation needs to be strong for a healthy home sales.  September’s low thirty-two percent first-time-home-buyer participation is attributed to rising interest rates and home prices.

But low housing inventory is also an issue.  September’s housing inventory decreased to 1.88 million existing homes available for sale (from the 1.91 available during the previous month).  NAR President Elizabeth Mendenhall stated:

“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.”

Economists at Fannie Mae believe that the housing market will continue to disappoint.  In an October 18th press release (fanniemae.com) Fannie Mae Chief Economist Doug Duncan stated:

“Our expectations for housing have become more pessimistic. Rising interest rates and declining housing sentiment from both consumers and lenders led us to lower our home sales forecast over the duration of 2018 and through 2019. Meanwhile, affordability, especially for first-time homebuyers, remains atop the list of challenges facing the housing market.”

But what do economists really know about the future?  Let’s hear it directly from the consumer!

Home buyer and seller attitudes about real estate

NAR’s Housing Opportunities and Market Experience survey tracks opinions from renters and homeowners about homeownership, economy, and the housing market.  The release of their third quarter 2018 survey indicates that sixty-three percent of respondents strongly or moderately believe that it’s a good time to buy a home.  Although optimism is somewhat diminished from the second quarter’s survey, there continues to be a positive sentiment about buying a home.  The survey’s positive sentiment continues even though a majority of respondents believed that home prices will continue to increase in the immediate six months.  Additionally, a majority of respondents believe that qualifying for a mortgage may be an obstacle to a home purchase.

The survey also concurs with other metrics indicating high consumer sentiment for the economy.  In light of the recent slide in home sales, NAR’s recent Housing Opportunities and Market Experience survey reveals a near-record high of sixty percent of households believe that the economy is improving.”  Adding to the strong sentiment is the survey’s increased monthly Personal Financial Outlook Index, which indicates that respondents believe that their financial situation will be better in six months.

The survey also indicates a record high of home sellers who believe it is a good time to sell a home.  But given the seasonal decline of housing inventory, it is likely this will translate to a surge of home listings in the spring.  The added inventory combined with high consumer sentiment will boost the housing market. So sayeth the consumer.

Original located at https://dankrell.com/blog/2018/11/01/attitudes-real-estate-market/

Copyright© Dan Krell
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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Real estate services personality

The “one-size-fits-all” service model is becoming an all too familiar experience in every day life.  You encounter it when you go to the doctor’s office.  A day at the mall is certainly a one-size-fits-all adventure.  Now, there is also the pressure towards automated buying and selling systems in the real estate industry.  Real estate services that is one-size-fits-all?  The idea of a one-size-fits-all real estate transaction is becoming trendy from both online companies and local real estate companies.

How do real estate services treat clients?

real estate services
Real Estate Services (infographic from nar.realtor(

The move toward systematizing consumer encounters comes from the corporate goal of profiting from efficiency.  Don’t get me wrong, there is nothing wrong from a business making money.  After all, making money is the basis of our economy.  And the one-size-fits-all system for home buying and selling is a business solution during a healthy housing market where homes sell quickly.

However, the systematization of the service industry, including real estate, is not welcome by all consumers.  There is some acknowledgement that a systematized real estate transaction can have unfortunate outcomes when the plan is derailed.  Not all real estate transactions are easy, nor do all homes sell quickly.  It is a fact that that most home buyers and sellers still want an expert they can count on to help them navigate one of the most expensive and stressful transactions of their life.

Customer service research

Gauging the effects of a systematized service industry on the consumer is a growing interest.  One recent study examined customer service reactions when the provider system fails (Diaz, Gomez, Martin-Consuegra, Molina; The Effects of Perceived Satisfaction with Service Recovery Efforts: A Study in a Hotel Setting; Ekonomie a Management; 2017, 20:4 p.203-18).  The study suggested that customer issues are inevitable.  They conclude that customer service models should have strategies to address and resolve issues to maintain positive customer relationships.

Another study suggested that when it comes to automated service, some service industries are better suited than others (Scherer & Von Wangenheim;  Man Versus Machine-How the Service Channel Affects Customers’ Responses to Service Encounters; AMA Winter Educators’ Conference Proceedings; 2016, Vol. 27).  The authors suggest that a consumer’s expectation is guided by how a service is provided.  Satisfaction levels are increased when personal services are delivered by a human.  Furthermore, they found that consumers who prefer technology or automated services tend to be ego-centric.  These “self-service” consumers attribute success to their abilities, while shifting blame to externals when there is a failure.

Real estate services for all personalities

The growing body of research may explain why real estate agents have not become extinct in a technological world.  Instead, the profession has endured.  Moreover, Realtors have embraced technology (for better or worse).  As new technologies make the home buying and selling process easier, the industry will undoubtedly adapt.  The fad of systematizing the real estate transaction, as well as buyer and seller encounters, is in reality a “one-size-fits-some” solution.  In other words, there is a place for the automated and systematic real estate transaction, but it’s not for everyone.

Before you embark on your home buying or selling journey, you should think about your needs.  What are your expectations?

As a real estate consumer, you have a duty to explore your options for real estate services.  You should interview and compare real estate services. Questions to ask your real estate agent before you buy or sell a home:

  • Is there one point of contact, or do you have to deal with a “team” of people for different situations.
  • What do you do if the point of contact is not available?
  • How do they handle unexpected obstacles or emergencies?
  • Ask for recent client references whom you can call.

Original is located at https://dankrell.com/blog/2018/10/19/real-estate-services-personality/

Copyright© Dan Krell
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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Hire a reputable mover

mover checklist
Moving Checklist (from Federal Motor Carrier Safety Administration fmcsa.dot.gov)

Moving is stressful enough without having to deal with a rogue mover.  Before your hire a mover, do your research and know your rights.  Your rights may vary depending if your move is intrastate or interstate.  An intrastate move is within the same state, while an interstate move is between states.  Although intrastate movers are not licensed by the state of Maryland, there are a rules and consumer protection laws governing their business.  However, interstate movers must comply with Federal regulations.

Hiring a mover to move within Maryland (intrastate)

The Consumer Protection Division of the Maryland Attorney General published The Consumer’s Edge: Hiring a Mover? Protect Yourself!  The publication outlines your rights for a move within the state of Maryland (marylandattorneygeneral.gov). The pamphlet advises that estimates must be written, and must specify if it’s binding or non-binding.  Binding estimates are prohibited to change, while non-binding estimates in Maryland are capped and cannot exceed 25 percent of the original estimate.  Be wary of low-ball estimates, or a mover who does not ask a lot of questions about your possessions.  Don’t sign a blank or incomplete estimate.

Hiring a Mover? Protect Yourself!
Hiring a Mover? Protect Yourself! (from marylandattorneygeneral.gov)

If your move is within Maryland, consult the Maryland Movers Conference.  The MMC is a non-profit organization that is part of the Maryland Motor Truck Association, and works with “governmental authorities and consumer groups to promote the highest standards for the moving industry in Maryland.”  The organization established a Registered Mover Program, where movers abide by a code of ethics and other rules.  You can view valuable consumer info and the MMC’s list of member movers at their website (mdmovers.org).

Hiring an interstate mover

mover pamphlet
FMCSA Ready to Move Brochure
(fmcsa.dot.gov)

If your move is interstate, your mover is regulated by the Federal Motor Carrier Safety Administration of the US Department of Transportation.  The FMCSA website “Protect Your Move” (www.fmcsa.dot.gov/protect-your-move) provides an abundance of information to help you choose a reputable mover as well as tips and a checklist to help make your move less hectic.  The FMCSA maintains a registry of legitimate interstate movers from which you can search and view licensing, insurance, as well as complaints.

During the planning stage of your interstate move, Federal regulation requires your mover to provide you with a copy of the booklet “Your Rights and Responsibilities When You Move” and a copy of FMCSA’s brochure “Ready to Move.”  These publications (available on the FMCSA website) offer insight to make an informed decision, as well as understand your consumer rights in case something goes awry.


The FMCSA suggests that estimates that sound too good to be true are often a way for scammers to get your business. What are the red flags for which to be on the lookout? Be wary of:

  • Estimates given without onsite inspection of your possessions
  • A demand for cash or a large deposit
  • Blank or incomplete documents
  • Refusal to provide a written estimate
  • Movers who claim to be insured without providing proof
  • A mover who generically answers the phone “movers” instead of using the company’s name
  • No address or insurance info on the company’s website
  • Use of a rental truck instead of a company branded truck.
Moving Rights and Responsibilities
Rights & Responsibilities Booklet (fmcsa.dot.gov)

Movers must deliver your possessions.  Call the police if a mover threatens to not deliver for any reason.  Interstate movers may be in violation of Federal law if they hold your shipment “hostage.”  The FMCSA offers some recourse if you feel victimized by an interstate mover or broker.  The Protect Your Move Website has an online tool to make complaints.  A complaint may trigger a Federal enforcement investigation against the mover.

Original published at https://dankrell.com/blog/2018/08/29/hire-reputable-mover/

Copyright© Dan Krell
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Protected by Copyscape Web Plagiarism DetectorDisclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

 

 

 

 

Home buyer fatigue

Home Buyer Fatigue or Housing Derangement Syndrome?

home buyer fatigue
June Housing Stats (infographic from nar.realtor)

Although home prices remain strong, the volume of home sales has dropped off during June.  This is causing some in the media to exhibit “housing derangement syndrome” by reporting a pending housing collapse.   However, there is a more sensible answer and that may be “home buyer fatigue.”  Buyer fatigue is not solely used in real estate, rather it’s a term to describe consumers who do not engage in a market sector for a short duration for various reasons.  Home buyer fatigue has occurred multiple times since 2013 after a period of sustained home price increases.

Let’s look at the facts.

The National Association Realtors (nar.realtor) reported in a July 23rd press release that the total existing home sales for June decreased 0.6 percent, and is down 2.2 percent from the same time last year.  Home sales in Montgomery County have also been retreating.  The Greater Capital Area Association of Realtors (gcaar.com) reported sales declines for single-family and condos during June (-3.4 percent and -13.9 percent respectively).  Year-to-date sales are also below last year’s transactions for the same time period.

NAR chief economist Lawrence Yun observed:

There continues to be a mismatch since the spring between the growing level of homebuyer demand in most of the country in relation to the actual pace of home sales, which are declining.

However, his explanation for the home sales retreat sounds like home buyer fatigue:

“The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation’s housing market. What is for sale in most areas is going under contract very fast and in many cases, has multiple offers. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales.”

Although national home prices are increasing, the gains remain steady.  The latest S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported on July 31st (spice-indices.com) indicated a 6.4 percent annual gain during May, which is the same as the previous month.  However, the 20 City Index showed a slight decline to 6.5 percent (from 6.7 percent).  Seattle, Las Vegas and San Francisco continue to lead the nation with double digit gains (13.6, 12.6 and 10.9 percent respectively). The Washington DC region, however, showed a modest annual home price growth of 3.06 percent.

As home sales decline, many contribute home buyer fatigue to increasing home prices and mortgage interest rates.  A few have already begun to ring the warning bells of bubble popping home price deflation citing Seattle and San Francisco’s housing woes.

However, those exhibiting housing derangement syndrome need to take a deep breath and look at the facts.  Most of the country’s home values are increasing at a sustainable rate.  Additionally, contrary to reports of inventory surpluses, home sale inventory continues to be low in most of the country (Montgomery County single-family and condo listings are below last year’s level by -9.3 and -12.8 percent respectively).

It’s also important to look deeper into what may be driving those overheated housing markets to experience the sharp price spikes and recent sale declines.  For example, Seattle’s housing juggernaut may be tied to Amazon’s nine years of a seemingly hiring frenzy.  According to reporting by Matt Day for The Seattle Times (Amazon’s employee count declines for first time since 2009; seattletimes.com; April 26, 2018), Amazon begun corporate layoffs, as well as a possible hiring freeze, earlier this year.

Original published at https://dankrell.com/blog/2018/08/02/home-buyer-fatigue/

Copyright© Dan Krell
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Protected by Copyscape Web Plagiarism DetectorDisclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Affordable housing

affordable housing
Affordable housing (graphic from montgomerycountymd.gov)

It’s no secret that housing is expensive.  Home prices are relentlessly marching forward, making it more difficult for first-time home buyers to purchase a home.  One of the contributing factors is the low inventory of homes for sale.  The deficiency of homes on the market is limiting options and stoking competition among determined home buyers, many of whom are willing to offer slightly more than then their cohorts.  All this puts upward pressure on home prices and impacting affordable housing.

Having enough for a down payment and closing costs is a hurdle for many first-time home buyers.  Home buying programs exist to help home ownership more affordable for home buyers.  The Maryland Mortgage Program (mmp.maryland.gov) offers down payment assistance in the form of loans, an employer match program, or financial grants.  In Montgomery County, the Housing Opportunities Commission of Montgomery County (hocmc.org) offers several down payment assistance options, including the House Keys 4 Employees program for many Montgomery County Employees.  Of course, you must meet eligibility, so check with your lender and/or mortgage program.

Affordable housing is not only an issue for home buyers.  It’s also an issue for renters.  According to the US Census Bureau’s American Community Survey five-year estimates results (census.gov), the median rent in the US increased about $21.  That does not sound life changing, however, it is the result of an analysis of nationwide monthly rents.  Results of the Survey indicated that, “Of the 382 metropolitan areas in the United States, the median gross rent in 156 areas did not change between 2007 to 2011 and 2012 to 2016…”  However, “Of the 219 that did change, increases outnumbered decreases four to one with 175 increases and 44 decreases.

Some areas had a decrease in rent, while others faced increases.  Among some of the areas with top increases include Andrews TX and McKenzie County ND, where monthly rents increased an average of $352 and $397 respectively.

The Census Bureau recent survey on rent concludes that “gross rents are on the rise.”  Other Census data indicates that 2017 had the lowest percentage of renters move since 1988.  The combination of fewer available rentals and increased rents are making it difficult to find an affordable rental.

Although “affordable housing” has been tossed about like a football, it wasn’t until Mary Schwartz and Ellen Wilson’s (US Census Bureau) analysis of the 2006 American Community Survey that really gave it meaning (Who Can Afford To Live in a Home?: A look at data from the 2006 American Community Survey; census.gov).  The analysis revealed the percentage of income that is spent towards housing.

The report indicated that forty-six percent of renters spend 30 percent or more of their income on housing costs.  Compare that to home owners: thirty-seven percent of owners with mortgages and sixteen percent of owners without spent 30 percent or more of their income on housing.  Schwartz and Wilson came up with the “30 percent standard,” and discussed that thirty percent or more of income spent on housing is considered a “housing-cost burden.”

Addressing affordable housing for renters, Representative Joe Crowley introduced H.R.3670 – Rent Relief Act of 2017 to help renters with their housing-cost burden.  The credit would only be available for taxpayers whose gross income is less than $125,000.  The bill allows for a refundable tax credit when rent exceeds 30 percent of the individual’s gross income for the taxable year.  Depending on the renter’s gross income, the amount of the credit could range from 10 to 100 percent of the excess (above 30 percent).  One caveat is that if the tenant’s rent exceeds 150 percent of the fair market rent for that specific residence, the excess above 150 percent won’t be included for the purpose of determining the amount of the credit.  Government-subsidized renters would be able to claim a credit equal to 1/12 of the rent paid by the taxpayer.  Although the bill was last heard in the House Committee on Ways and Means, at the time of this article, it is being prepared by Senator Kamala Harris to be introduced in the Senate.

Maryland offers tax credits for some renters, check with the Maryland Consumer Rights Coalition (marylandtaxcredit.com) for qualifying information.

Original published at https://dankrell.com/blog/2018/07/26/affordable-housing/

Copyright© Dan Krell
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Protected by Copyscape Web Plagiarism DetectorDisclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.