home seller Archives - Page 15 of 31 - Real Estate News and Commentary

June 30, 2016July 11, 2019

Brexit benefits US housing

International home buyers (infographic from realtor.org)

The immediate response of Great Britain’s referendum to exit from the European Union was one of anxiety and fear. Some thought the separation would set off a global recession, matching the financial crisis of 2008. While others believed it would be a blip on the financial radar. Of course, the housing industry is watching to see how if the aftermath of the Brexit will affect home buyers and sellers. And it looks as if Brexit benefits US housing.

If you remember, last summer’s US market gyrations were attributed to China’s stock market declines. As a result, many home buyers who relied on their 401k’s (or other investments) for their down payments had to make other plans. Some were unable to buy. At that time, the National Association of Realtors® reported a decline in last August’s existing home sales, only to rebound in September (realtor.org). Will the aftermath of last week’s Brexit have a similar effect? Or maybe Brexit benefits US housing.

Some expect that British home prices will fall as a result of the Brexit, which could affect our housing market. Foreign home buyer investment in US housing will withdraw as foreign cash will look to the UK for housing bargains. This will most likely affect the luxury home sector of the market, where many foreign home buyers have parked their money.

In the meantime, initial reactions indicate that the Brexit benefits US housing! AnnaMaria Andriotis, writing for The Wall Street Journal (Mortgage Rates: How Low Can They Go?; wsj.com; June 28,2016) reported that mortgage interest rates may go lower as a result of the Brexit. Lower interest rates could make housing more affordable for home buyers, while home owners continue to have opportunities to lower their mortgage payments.

The housing market has already been brisk. The NAR reported on June 22^nd that existing home sales increased to its highest levels in nine years! Additionally, the S&P/Case-Shiller Home Price Index (spindices.com) reported June 28^th revealed an additional 5% year-over-year increase for April 2016.

NAR chief economist Lawrence Yun concluded that low mortgage rates are an incentive for many home buyers. Although he stated that first time home buyers are finding it difficult to enter the market for various reasons, repeat home buyers make up the majority of home sales. As home prices increase, many repeat home buyers are finding down payment funds in the form of the proceeds of their home sales.

Yun felt that first time home buyers may find that increasing home prices will be a continuing obstacle. This is compounded by the enduring low housing inventory. However, new home construction may add other options for home buyers.

Aside from the interest rate benefit to home buyers, mortgage lenders are finding new programs to help those with little down payment funds! Of course, the venerable FHA mortgage has been the go-to mortgage for those who qualify, because the down payment can be as low as 3.5%. The downside to the FHA mortgage is the mortgage insurance premium. To compete, Fannie Mae and Freddie Mac offer a 3% down payment program to those who qualify. Like its FHA counterpart, the conventional 3% down payment program has also required private mortgage insurance.

However, HousingWire (hosuingwire.com) has reported that a few lenders offer a 3% down payment mortgage program without the PMI. And within the last seven days, HousingWire reported that Quicken Loans and Guaranteed Rate Mortgage offer a 1% down payment mortgage program to those who qualify!

By Dan Krell
Copyright © 2016

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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.

June 17, 2016December 6, 2019

Home owner savvy

The playwright Oscar Wilde must have been fond of the idiom “nowadays people know the price of everything and the value of nothing,” because he used it in back to back works; first in The Picture of Dorian Gray, and then a variation in Lady Windermere’s Fan. Today, corrupted forms of Wilde’s phrase are wrongly attributed or misquoted – but the point is well made. More psychologist then poet, Wilde seemed to characterize a core consumer behavioral trait of seeking short term gain vs long term value – which applies to home owner savvy!

Consumers in the 19^th century were much like consumers today, such that they sought out to get a bargain; often times overlooking the costs from which it comes by. And what may have been in Wilde’s time a conflation of price and value, is still common today – especially for home owners. While many home owners pride themselves on their frugality in home maintenance, they don’t realize the consequences of their poor choices when it comes time to sell their home. Home owner savvy is also knowing about value.

Today’s home owner’s frugality comes honestly as a result of the great recession. A McKinsey Global Institute consumer sentiment survey from a year and half ago sums it up in the title: America the frugal: US Consumer Sentiment Survey (Martinez, Motiwala, and Sher; mckinsey.com; December 2014). Martinez, Motiwala, and Sher wrote in their economic analysis that “…Multiple years of austerity have left consumers with altered views about spending. Almost 40 percent say they will probably never go back to their prerecession approach to buying…”

While looking to spend less on maintenance and home repairs, home owners often ignore the effects of their thriftiness on the long term maintenance costs of their home. Trying to spend less often means becoming reactive to maintenance issues, instead of proactive. Reactive maintenance typically means that the plumbing, electrical, or roof issue the owner is repairing, may have been an ongoing problem that may have also affected other systems of the home. However, proactive home maintenance is an ongoing process that can prevent minor problems from becoming costly major issues and is home owner savvy.

John Riha invoked Ben Franklin’s “An ounce of prevention is worth a pound of cure” when writing about home maintenance and house values (How Much Value Does Regular Maintenance Add to Your Home?; houselogic.com). He repeats a common theme that regular preventative maintenance doesn’t only save you money down the line, but can add to a home’s sale price. Riha quotes University of Connecticut and Syracuse University studies that implies the value of a regularly maintained home may increase by 1% a year!

Riha recommends a “proactive maintenance strategy” to help stay on top of necessary repairs and system replacements. He suggests saving 1% to 3% of a home’s cost for regular maintenance. To help keep it “interesting,” he suggests repairing and updating one room per year. If you are unsure where to begin, a home inspection may help identify areas of immediate concern; as well as develop a regular maintenance schedule. Also, keeping records of ongoing repairs and upgrades will cement in a home buyer’s mind the amount of care you had for your home.

Home owner savvy is not necessarily about being frugal with home maintenance, which is also not about knowing the price of everything; but in reality, diminish the value of their home. Regular home maintenance can not only keep you comfortable and safe through the year, it may help you sell your home faster and for more!

Original published at https://dankrell.com/blog/2016/06/17/home-owner-savvy/

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May 20, 2016July 12, 2019

Presidential election and home sales

Elections have vastly changed in mood and intensity. It used to be that the candidates debated about substantive issues looking for win-win solutions, including housing. Maybe some of you remember how both the Clinton and Dole campaigns showcased their ideas of expanding the capital gains exemption during the 1996 election. Housing and home sales doesn’t seem to be a platform issue anymore. Elections have become divisive and nasty, even among the electorate; and for many Americans, the trending (real estate) election issue is – whom is moving to Canada!

That’s right, moving to Canada. Maybe you’ve heard someone at work or at the store proclaim they are moving to Canada if “the other candidate” wins the election. The theme of moving to Canada after the election has become a mantra so much so that it’s become part of pop culture. The idea has even been satirized by the likes of South Park. And of course there is the growing number of celebrities who vow to move to Canada if the election outcome isn’t to their liking.

Of course the threat of moving to Canada is tongue in cheek (for most), or is it? Nevertheless, leave it to astute real estate agents who realized that people considering such a move is now a target market. Agent ads and blog posts popped up in recent weeks reaching out to those disaffected home owners asking for their business. Reporting for Buzfeed, Craig Silverman reported on two agents who posted such an ad on their Facebook pages (Leaving Because Of Trump? These Texas Realtors Want To Sell Your House; buzfeed.com; May13, 2016). Although both agents received a lot of attention for their seemingly whimsical posts, there was a mixed response; some did not get the humor. It was reported that one of the two agents interviewed was asked to remove her post; and of course neither reported any new business from the posts.

Every four years, people wonder if presidential elections effect the real estate market. During the 2012 election cycle, the real estate portal Movoto took it upon itself to find an answer (David Cross; Election Years Are Bad for Home Prices; movoto.com; May 12, 2012). They analyzed historical data from the California Association of Realtors® and found that there is indeed a direct effect of a presidential election on home prices (at least in California). They determined that the average home sale price during an election year is lower than that of the years preceding and following an election.

Movoto’s hypothesis was: “Presidential election years are stressful for the American people and in times of uncertainty people are less likely to take chances—this includes making large purchases such as a new house.” While the National Association of Realtors® comment on Movoto’s findings was, “We’ve observed no correlation between levels of home sales and an election year. The market responds to a wide range of economic factors, including jobs, interest rates and consumer confidence.”

Although there maybe anecdotal evidence that presidential election years affect home prices; there is no doubt that the outcome of a presidential election effects policy, which as a result affects the economy and the housing market (see Experts: Housing to Grow Steadily, But Maybe Less So if Trump, Cruz or Sanders is Elected President; Zillow.com; May 17, 2016). But no one has yet suggested that US elections would have an effect on Canada’s real estate market.

By Dan Krell
Copyright © 2016

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May 6, 2016September 10, 2018

Home pricing strategy and housing market shift

home pricing strategy The apparent luxury home market collapse is most likely due to an increased inventory of luxury homes, and a lack of foreign investors (who were active in the market several years ago). The impact of reduced prices is noticeable in home price indices as well, as there seems to be a consensus that there is a hint of a slowdown of price appreciation.

Corelogic’s May Home Price Insights (corelogic.com) indicated that nationwide home prices during March increased 6.7% year over year; and projects 5.7% appreciation for next March. Additionally, the report highlights twelve states that have reached new home price highs. Month over month average home prices nationwide increased 2.1%; however next month’s projection is for a gain of only 0.7%.

April’s S&P/Case-Shiller National Home Price Index (spindices.com) indicted that February home prices increased at an annual rate of 5.3%, which is roughly the same as the previous month’s index. The hot real estate markets of Portland, Seattle, and Denver realized the highest year over year gains, growing at 11.9%, 11% and 9.7% respectively. However, the national 0.2% month over month gain was not as encouraging.

David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, provided commentary about the April S&P/Case-Shiller report, saying “…Home prices continue to rise twice as fast as inflation, but the pace is easing off in the most recent numbers…While financing is not an issue for home buyers, rising prices are a concern in many parts of the country. The visible supply of homes on the market is low at 4.8 months in the last report. Homeowners looking to sell their house and trade up to a larger house or a more desirable location are concerned with finding that new house. Additionally, the pace of new single family home construction and sales has not completely recovered from the recession.”

Although the recent home price indices have not yet established negative trends, they are telling of a housing market under pressure. Local home sellers should take note that the S&P/Case Shiller Home Price Index for the Washington DC metro area indicates a month over month -0.2% (negative two tenths of a percent) change in the average home price. The Corelogic HPI Market Condition Indicator for the Washington DC-MD-VA-WV metro area is “Overvalued.”

If you are planning a home sale during the latter half of this year, you should be extra aware of the local market trends; paying attention to competition and general inventory. Home pricing strategies that were common last year may not work to your advantage. Over pricing your home could result in driving home buyers to your competition, rather than netting a higher sales price.

Original post at https://dankrell.com/blog/2016/05/06/new-home-sale-strategy-needed-as-home-prices-start-to-shift/

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April 21, 2016November 23, 2021

Coping with today’s market

It’s that time of year again; the real estate market is getting hot along with the temperature. And that’s about the only thing most are able to predict about this year’s real estate market. Since the Great Recession, early forecasts about home buying and selling trends have typically missed the mark; the trends have varied, sometimes significantly, from year to year. Notwithstanding a very active season, many will be in for a surprise; some will be pleased about their home sale, while others not so much. And if you are selling a home, I’ve provided some tips to help you cope with today’s market:

Home buyers in today’s market

The most important point to remember this year: many home buyers are looking to buy a home, but not necessarily yours. The notion that your home appeals to all home buyers is false. If your home isn’t selling as fast as you thought it would, consider stepping back for a moment to re-evaluate your home and marketing plan.

Most home buyers are looking for a “turn-key” home and won’t settle for just anything on the market. Additionally, most are not willing to spend time and money updating a home they just purchased. Know your home before marketing it and consider making repairs if your home has considerable deferred maintenance.

Prepare your home for today’s market

The next item to remember this year, is that no matter how well your home shows: be prepared for a less than complimentary home inspection. Because there are a number of systems and many components to your home; chances are that there are items that need attention, repairing, and/or replacement – which the home inspector will cheerfully point out. Home inspectors will visually inspect your home, probing structural components when necessary; a detailed report indicates their observations. Most home inspectors are not experts in all aspects of home construction; and commonly recommend other professionals to examine items more closely.

As a home seller, you should understand that buyers in today’s market are under pressure about the investment they are undertaking; and are willing to walk away based on the home inspection findings. Sometimes, it’s not what – but how it’s said that will rattle buyers. Regardless, an uncomplimentary report does not have to blow up the deal. Be prepared for extra rounds of negotiating after the home inspection. Every transaction is different, and your agent should provide guidance on what’s reasonable and appropriate.

A final thought: don’t get greedy, but don’t leave money on the table either. Although inventory remains an issue in a number of areas, don’t feel compelled to over price your home based on the lack of homes for sale. However, don’t be complacent with the “average” home sale price of the neighborhood either. When comparing recent neighborhood sales, you should make pricing adjustments (plus and minus) depending on differences in your home’s age, amenities, size and other factors.

A word of caution: There is a growing trend in the reliance on automated valuations by real estate agents. AVM (automated valuation models) are helpful, but not always accurate. These reports are based on public information about your home and may not include correct information. If your agent recommends a sale price based an automated valuation, you should review the report attentively. If the report confidence level is low to medium, be prepared to carefully review the report and comparables, making adjustments as needed.

Original located at https://dankrell.com/blog/2016/04/21/home-sale-tips-on-coping-with-todays-market/

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