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Some believe that the combined effects of the new tax code and rising mortgage rates will have an adverse impact on residential real estate prices in 2018. However, the clear majority of recently surveyed housing experts believe that home values will continue to rise this year.
What is the Home Price Expectation Survey?
Each quarter, Pulsenomics surveys a nationwide panel of economists, real estate experts and investment & market strategists. Those surveyed include experts such as:
Where do these experts see home values headed in 2018?
Here is a breakdown of where they see home values twelve months from now:
Almost ninety-nine percent of the top experts studying residential real estate believe that prices will appreciate this year, and over 93% believe home values will appreciate by at least 3%.
#ForBuyers #ForSellers #Pricing #SimardRealtyGroup #eXpRealty
Interest rates hovered around 4% for the majority of 2017, which gave many buyers relief from rising home prices and helped with affordability. In the first quarter of 2018, rates have increased from 3.95% up to 4.45% and experts predict that rates will increase even more by the end of the year.
The rate you secure greatly impacts your monthly mortgage payment and the amount you will ultimately pay for your home. Don’t let the prediction that rates will increase stop you from purchasing your dream home this year.
Let’s take a look at a historical view of interest rates over the last 45 years.
Be thankful that you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.
#FirstTimeHomeBuyer #InterestRates #SimardRealtyGroup #eXpRealty
The price of any item is determined by the supply of that item, as well as market demand. The National Association of REALTORS (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their monthly REALTORS Confidence Index.
Their latest edition sheds some light on the relationship between Seller Traffic (supply) and Buyer Traffic (demand).
The map below was created after asking the question: “How would you rate buyer traffic in your area?”
The darker the blue, the stronger the demand for homes in that area. Only four states had a ‘stable’ demand level.
The index also asked: “How would you rate seller traffic in your area?”
As you can see from the map below, 25 states reported ‘weak’ seller traffic, 21 states reported ‘stable’ seller traffic, 3 states and Washington D.C. reported ‘strong’ seller traffic, and only 1 state reported ‘very strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the buyers who are out looking for their dream homes.
Looking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet buyer demand, prices will continue to increase. If you are debating listing your home for sale, meet with a local real estate professional in your area who can help you capitalize on the demand in the market now!
#ForSellers #ForBuyers #SimardRealtyGroup #eXpRealty
Here are five reasons listing your home for sale this spring makes sense.
1. Demand Is Strong
The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase…and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home.
Take advantage of the buyer activity currently in the market.
2. There Is Less Competition Now
Housing inventory has declined year over year for the last 32 months and is still under the 6-month supply needed for a normal housing market. This means that, in the majority of the country, there are not enoughhomes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.
Historically, the average number of years a homeowner stayed in their home was six but has hovered between nine and ten years since 2011. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.
The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.
3. The Process Will Be Quicker
Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the average time it took to close a loan was 45 days.
4. There Will Never Be a Better Time to Move Up
If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, AND you’ll be able to find a premium home to call your own!
Prices are projected to appreciate by 4.8% over the next year according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.
5. It’s Time to Move on With Your Life
Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.
That is what is truly important.
#ForBuyers #ForSellers #SimardRealtyGroup #eXpRealty
#ForSeller #SpringMarket #Connecticut #SimardRealtyGroup #eXpRealty
Recently, Freddie Mac published an Insight Report titled Nowhere to go but up? How increasing mortgage rates could affect housing. The report focused on the impact the projected rise in mortgage rates might have on the housing market this year.
Many believe that an increase in mortgage rates will cause a slowdown in purchases which would, in turn, lead to a fall in house values. Ultimately, however, prices are determined by supply and demand and while rising mortgage rates may slow demand, they also affect supply. From the report:
“For current homeowners, the decision to buy a new home is typically linked to their decision to sell their current home… Because of this link, the financing costs of the existing mortgage are part of the homeowner’s decision of whether and when to move.
Once financing costs for a new mortgage rise above the rate borrowers are paying for their current mortgage, borrowers would have to give up below-market financing to sell their home.
Instead, they may choose to delay both the sale of their existing home and the purchase of a new home to maintain the advantageous financing.”
The Freddie Mac report, in acknowledging this situation, concluded that prices are not adversely impacted by higher mortgage rates. They explained:
“While there is a drop in the demand for homes, there is an associated drop in the supply of homes from the link between the selling and buying decisions. As both supply and demand move together in this way they have offsetting effects on price—lower demand decreases price and lower supply increases price.
They went on to reveal that the Freddie Mac National House Price Index is…
“…unresponsive to movements in interest rates. In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”
The following graph, based on data from the report, reveals what happened to home prices the last six times mortgage rates rose by at least 1%.
Bottom LineWhether you are a move-up buyer or first-time buyer, waiting to purchase your next home based on the belief that prices will fall because of rising mortgage rates makes no sense.
#BuyingMyths #InterestRates #SimardRealtyGroup #eXpRealty
Last week, we shared “7 Factors To Consider When Choosing A Home To Retire In.” For some homeowners, these seven factors can be taken into account with a home renovation, but is it worth it to remodel or change floor plans?
Let’s look at this example.
Let’s say you have a 4-bedroom colonial style home in a great school district. The neighborhood is amazing, and you are very comfortable there, but your kids are all grown up and the original benefits of the home no longer apply.
You’ve always wanted a huge master suite and are considering merging 3 of the smaller bedrooms on the second floor to achieve this dream.
In the short term, you are over the moon excited about your newly renovated oasis.
In the long term, when you go to sell your home down the road, you’ve now taken a 4-bedroom home in a great school district and turned it into a 2-bedroom home. Your pool of potential buyers has shrunk significantly and so has the value of your home (unless you are able to find someone who has the exact needs you have today!).
Why not consider listing your 4-bedroom home now and moving into a gorgeous 2-bedroom with a master suite? Your house can become a home for the next family looking for that perfect neighborhood with a great school district to raise their kids in!
You may even be able to achieve your dream in the same area you love, without having to give up your favorite restaurants and grocery stores.
If you are debating a major renovation that would change the layout of your home, before you pick up that sledgehammer, meet with a local real estate professional who can show you the available listings in your area that might meet your needs today!
#HomeRenovation #Sellers #Buyers #SimardRealtyGroup #eXpRealty
CoreLogic’s latest Equity Report revealed that 675,000 US homeowners regained positive equity in their homes in 2017. This is great news for the country, as 95.1% of all mortgaged properties are now in a positive equity situation.
“U.S homeowners with mortgages (roughly 63% of all the properties) have seen their equity increase by a total of $908.4 billion since the fourth quarter 2016, an increase of 12.2%, year over year.”
Price Appreciation = Good News for HomeownersFrank Nothaft, CoreLogic’s Chief Economist, explains:
“Home-price growth has been the primary driver of home-equity wealth creation. The CoreLogic Home Price Index grew 6.2 percent during 2017. The largest calendar-year increase since 2013. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years.”
He also believes this is a great sign for the market in 2018, saying:
“Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years.”
This is great news for homeowners! But, do they realize that their equity position has changed?
A study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their homes as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 4.9% of homes are in that position (down from 6.3% in Q4 2016).
The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%) when in actuality, 83% do!
This means that 46% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a house (either larger or smaller) that better meets their current needs.
Fannie Mae spoke out on this issue in their report:
“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”
If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2018! Meet with a local real estate professional today who can help you evaluate your situation and assist you along the way!
#sellers #buyers #SimardRealtyGroup #eXpRealty
If your house no longer fits your needs and you are planning on buying a luxury home, now is a great time to do so! Recently, the Institute for Luxury Home Marketing released its Luxury Market Report which showed that in today’s premium home market, buyers are in control.
The inventory of homes for sale in the luxury market far exceeds the number of people searching to purchase these properties in many areas of the country. This means that homes are often staying on the market longer or can be found at a discount.
Those who have a starter or trade-up home to sell will find buyers competing, and often entering bidding wars, to be able to call their house their new home.
The sale of your starter or trade-up house will help you come up with a larger down payment for your new luxury home. Even a 5% down payment on a million-dollar home is $50,000.
But not all who are buying luxury properties have a home to sell first.
A recent Bloomberg article gave some insight into what many millennials are choosing to do:
“A new generation of affluent homebuyers powered by a surge in inherited wealth is driving the luxury-home market, demanding larger spaces and fancier finishes, according to a report heralding ‘the rise of the new aristocracy.’”
The best time to sell anything is when demand is high, and supply is low. If you are currently in a starter or trade-up house that no longer fits your needs and you are looking to step into a luxury home, now’s the time to list your house for sale and make your dreams come true.
#Buyers #LuxuryMarket #SimardRealtyGroup #eXpRealty