Tuesday, May 21, 2013
Thursday, May 9, 2013
NAR: "The supply/demand balance is clearly tilted toward sellers in a good portion of the country" -
By Teke Wiggin
By Teke Wiggin
Wednesday, May 1, 2013
(BPT) - Key indicators point to conditions for a seller’s real estate market this spring. With fewer homes on the market, low interest rates, rising home prices and lower unemployment rates, there will be increased competition for buyers and faster sales for homeowners looking to move. With some planning and understanding of the market, it’s possible for both groups to make the most of this evolving marketplace.
“Dramatic increases in both sales and prices are bringing homebuyers and sellers back to the market, indicating the worst of the housing crisis is behind us,” says Margaret Kelly, CEO of RE/MAX, LLC. “The market ended 2012 on a positive note and there’s every reason to believe 2013 will be even stronger.”
Whether you’re planning to sell your house or are in the market to buy one, here are some tips for succeeding in the emerging seller’s market:
If you’re selling
“Some rules of smart selling never change, no matter what the market is like,” Kelly says. “Even with improved home prices and fewer homes on the market, sellers must still work to make their houses appealing to buyers who want to be able to envision themselves in the home.”
Curb appeal is vital. Keep landscaping neat, well-groomed and appealing with bright flowers, cut grass and well-trimmed shrubs. Sidewalks and paths should be clean and free of debris, and entryways well-lit. To really spruce up your entryway, consider a fresh coat of paint on the front door.
Inside, repaint. Painting is a cost-effective way to freshen decor and gives you the opportunity to create a neutral environment that buyers will be able to picture themselves in. Declutter throughout the house, including closets, and remove personal photographs.
Choose a real estate agent who knows your area. A well-priced home sells quickly and helps ensure you get the most for your house. A knowledgeable agent can help you set the right price – one that attracts buyers and maximizes your return. Agents also handle the legwork involved in selling a home, from effectively marketing your house to negotiating with the buyer’s agent and facilitating the closing.
Finally, be patient. "We’re again seeing cases of bidding wars in some markets," Kelly says. "With fewer homes on the market in many areas of the country, it’s possible you could receive multiple offers. It may pay to take a "wait-and-see" attitude toward the first offer. Patience may garner you multiple offers and a better chance of getting your asking price."
If you’re buying
Greater competition in a seller’s market requires buyers to be able to move quickly and decisively. Before you begin home shopping, make a list of must-haves and want-to-haves. This list will help your agent narrow down the homes you’ll be looking at.
Also, get pre-approved for a mortgage. "There’s no worse feeling than watching your dream home slip through your fingers because your financing fell through, or because another bidder had a guarantee of financing and you did not," Kelly says.
While no one wants to pay more than they absolutely must, remember that in a seller’s market homeowners may receive multiple offers. If your initial bid is too low, you may find yourself quickly out of the running.
Also, be flexible on closing dates – often, sellers like sooner rather than later. And avoid placing too many contingencies on an offer. Working with a buyer’s agent can help you tailor an offer that will appeal to the seller as cost-effectively as possible. An agent will also be able to help you secure information on schools, entertainment, amenities and safety in communities you’re considering.
From the Capital Gazette
Thursday, April 11, 2013
Realtor.com: Listings down 15.2 percent from a year ago in March
|Data point||Percent change, March 2012 to March 2013||March 2013 value|
|Number of listings||-15.22%||1.53 million|
|Median age of inventory (days)||-12.35%||78|
|Median list price||+0.05%||$190,000|
Wednesday, April 3, 2013
Part III – Rents Are Skyrocketing
Whether you own or rent, you will have a monthly housing expense. The question is how that expense will change in the future. When you purchase a home, for the most part, you lock-in that monthly housing expense for the length of the mortgage you take (15 or 30 years for example). When you rent a home, your housing expense is impacted by movements in the supply and demand for rental properties.
Historically, residential rental rates increase by 3.2% on an annual basis. However, in the current housing environment, there is an increasing demand for residential rental properties. This increase in demand has dramatically impacted rates. Zillow, in their most recent report, revealed that rental rates in the U.S. increased by 4.5% over the last twelve months. Other studies have projected rental rate increases of 4-5% over the next few years.
The only way to have control of your housing expense is to buy.
But Isn’t Buying Much More Expensive Than Renting?
Not right now! As a matter of fact, with prices down and mortgage rates at historic lows, it is LESS EXPENSIVE to buy than rent in most areas. In a recent report, Truliarevealed it is cheaper to buy than rent in ALL of America’s largest regions.
According to Jed Kolko, Trulia’s Chief Economist:
“People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat. Buying remains cheaper than renting in all 100 large metros. Even buyers who can’t get today’s lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets.”
However, Kolko went on to say that this opportunity may soon disappear:
“Although buying a home is still cheaper than renting, the gap is closing. In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. By next year, buying could be more expensive than renting in some housing markets, even for people with the best credit.”
Again, the only way to lock-in your monthly housing expense is to take that decision out of the hands of a landlord by owning. With both prices and interest rates set to increase, the best time to buy is right now.
by THE KCM CREW on MARCH 27, 2013
Monday, April 1, 2013
Part II – Interest Rates Are Increasing
A big component in the cost of a home is the mortgage interest rate a purchaser pays. Understanding where rates are headed will help in making a decision whether to buy now or wait.
So, Where Are Rates Headed?
No one can know for sure. The Fed has been artificially holding rates down to stimulate the economy. However, as the economy improves, many experts expect rates to creep up. As an example, HSH Associates, the nation’s largest publisher of mortgage and consumer loan information, recently explained:
“The stronger the economy becomes, the higher rates may grind; the Federal Reserve is keeping them low to goose the economy, but an economy responding to the Fed’s medicine will soon see less of a need for it in order to function. If not otherwise manipulated, higher rates are the natural result of a growing economy, as rising demand for available credit supply and concerns about inflation allow costs to rise.”
The Mortgage Bankers Association (MBA) agrees. They were quoted in HousingWire late last year regarding their thoughts on where rates would be headed in 2013.
“After reaching record lows in 2012, mortgage rates are expected to creep up slowly in 2013, the Mortgage Bankers Association predicted.”
In the MBA’s latest Mortgage Finance Forecast they forecast that the 30 year interest rate will be 4.3% by the end of the year. This represents an increase of almost a full percentage point from the 3.4% rate available at the end of 2012.
For example, we show the impact a one percent increase in rate will have on the monthly principal and interest payment on a $200,000 mortgage.
Freddie Mac’s Weekly Primary Mortgage Market Surveyreveals that rates have increased by 2/10ths of a percentage point already this year.
As we mentioned, no one knows for sure where rates will be a year from now. But, many experts think they may be as much as a point higher. With rising residential real estate prices and the possibility of higher mortgage rates, waiting to buy a home makes no sense in our opinion.
Tomorrow, we will look at skyrocketing rents.
by THE KCM CREW on MARCH 26, 2013
Wednesday, March 27, 2013
Part I – Prices Are Rising at an Accelerated Rate
The price of a home is the major consideration when deciding whether or not it makes financial sense to purchase a house. Experts are not only projecting that house values will increase in 2013. They are also more optomistic in the level of appreciation they are projecting as the market begins to heat up. Here are some examples:
The Home Price Expectation Survey
The latest survey of a nationwide panel of 118 economists, real estate experts and investment and market strategists reveals they project home values to end 2013 up an average of 4.6% according to the first quarter. This is after they had projected a 3.1% increase just three months ago.
Bank of America
In a report titled, Someone Say House Party?, Bank of America analysts revised their projections upward:
“Home prices continue to show momentum amid shrinking inventory and record high affordability, prompting us to revise up our original forecast of 4.7% for home prices this year. We now expect national home prices, as defined by the S&P Case Shiller home price index, to increase 8% this year.”
According to a report in DSNews, Capital Economics also upgraded their prediction:
“Strong demand and tight inventory have brought existing home sales back to ‘normal’ levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to “loosen the purse strings slightly” and lend a little more freely.These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5% price gain this year up to 8%.”
In an article from HousingWire, Morgan Stanley joined the party:
“Strong momentum in home prices as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade their home price appreciation projections to roughly 7% (from 5%) for 2013, according to its latest global securitized credit report…“The momentum in most metrics of housing activity is running well ahead of the pace we had expected,” said James Egan, Jose Cambronero and Vishwanath Tirupattur, analysts for Morgan Stanley.”
Not only are prices projected to appreciate. Experts are actually revising their projections upward as demand maintains its momentum.
Tomorrow, we will look at increasing interest rates.
by THE KCM CREW on MARCH 25, 2013