2 Things You Need to Know to Properly Price Your Home
In today’s housing market, home prices are increasing at a slower pace (3.7%) than they have over the last eight years (6-7%). However, they are still are above historical norms. Low supply of listed homes and high demand from buyers has pushed prices to rise rapidly.
In the mind of the homeowner, annual home price appreciation over 6% has become the new normal. This becomes a challenge when a homeowner looks to refinance or sell their home, as the expectation of what the homeowner believes the home should be worth does not always line up with the bank’s appraisal.
Every month, the Home Price Perception Index (HPPI) measures the disparity between what a homeowner seeking to refinance their home believes their house is worth and what an appraiser’s evaluation of that same home is.
Over the last five months, the gap between the homeowner’s opinion and the bank’s appraisal has widened to -0.78%. This is important for homeowners to note, as even a 0.78% difference in appraisal can mean thousands of dollars that a buyer or seller would have to come up with at closing (depending on the price of the home).
The chart below illustrates the changes in home price estimates over the last 12 months.
While the appraisal gap widens, another trend is also becoming more common.
According to realtor.com, “the share of homes which had their prices cut increased by 2% compared to last year”. Thirty-seven out of the 50 largest US housing markets saw an increase in overall price reductions.
In today’s market, you need an expert agent who can help price your house right from the start. Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the house. In reality, nothing is wrong- the price was just too high!
If you are planning on selling your house in today’s market, let’s get together to set your listing price properly from the start!
The Impact Staging Your Home Has On Your Sale Price [INFOGRAPHIC]
- The National Association of Realtors surveyed their members & released the findings of their Profile of Home Staging.
- 62% of seller’s agents say that staging a home decreases the amount of time a home spends on the market.
- 50% of staged homes saw a 1-10% increase in dollar-value offers from buyers.
- 77% of buyer’s agents said staging made it easier for buyers to visualize the home as their own.
- The top rooms to stage in order to attract more buyers are the living room, master bedroom, kitchen, and dining room.
Top Days to List Your Home for Sale [INFOGRAPHIC]
- ATTOM Data Solutions conducted an analysis of more than 29 million single family home and condo sales over the past eight years to determine the top days to list your home for sale.
- The top five days to list your home brought in a 10% premium over market value and are all in either May or June!
- “Families start their home search when they know their kids will be out of school and when the weather is ideal for home viewing and moving, giving home sellers an upper hand in price negotiations.”
- There is still time to list your home before these dates pass you by!
What Would Make You Sell Your House?
There are many reasons why a homeowner decides to sell their house and move. The latest Generational Trends Report from the National Association of Realtorsasked recent home sellers to share their reason for moving.
The younger the respondents, the more likely their top response centered around needing a larger home (ages 29 to 53). Relocating for a job was the top reason for those ages 54 to 63 and the second most popular response for those under 53. The chart below shows the breakdown for these two reasons.
For homeowners over the age of 64, wanting to be closer to friends and family served as the top motivator to move. Downsizing to a smaller home or moving due to retirement came in as a close second and third.
Have you outgrown your current house? Are you a homeowner who can relate to wanting to be closer to family and friends? Is your house becoming a burden to clean now that the kids have moved out?
Let’s get together to set you on the path to selling your current house and finding the home that fits your needs, today!
Selling Your House: Here’s Why You Need A Pro In Your Corner!
Real estate agents are trained and experienced in negotiation while, in most cases, the seller is not. Sellers must realize that their ability to negotiate will determine whether or not they get the best deal for themselves and their families.
Here is a list of just some of the people with whom the seller must be prepared to negotiate with if they decide to For Sale by Owner (FSBO):
- The buyer, who wants the best deal possible
- The buyer’s agent, who solely represents the best interests 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 termite company, if there are challenges
- The buyer’s lender, if the structure of the mortgage requires the sellers’ participation
- The appraiser, if there is a question of value
- The title company, if there are challenges with certificates of occupancy (CO) or other permits
- The town or municipality, if you need to get the CO permits mentioned above
- The buyer’s buyer, in case there are challenges with the house your buyer is selling
The percentage of sellers who have hired real estate agents to sell their homes has increased steadily over the last 20 years. Let’s get together to discuss all that we can do to make the process of selling your house easier for you.
Homeowners: Now Is A Good Time To Sell Your House
Every month, the National Association of Realtors (NAR) releases their Seller Traffic Index as a part of their Realtors Confidence Index. In the latest release, NAR reported that homeowners have been reluctant to sell their houses. This is reflected when broken down by state. Only 11 states have a stable level of seller traffic compared to the remainder of the country, which came in with a weak rating.
As we can see in the following table, the number of people who moved last year is half of what the rate was in the 1980s.
This does not come as a surprise, as tenure length (the number of years someone owns a home before moving again) among existing homeowners has increased. It has risen from an average of 6 years from 1985 to 2008, up to 9.5 years over the last few years. This is shown in the graph below:
As we can see, there is a pent-up seller demand!
What led to this change in behavior? Falling prices during the housing crisis led to many homeowners having negative equity in their home, meaning they owed more on their mortgage than the home was worth. Others were able to secure a low interest rate on their mortgage and have not been quick to obtain a new mortgage with a higher rate.
Will this trend continue?
Recently NAR reported that “69% of people believe now is a good time to sell a home.”
With a strong economy, low interest rates, and wages continuing to rise, some homeowners will be ready to put their house on the market and move up to the home of their dreams!
There is a great opportunity for sellers to take advantage of the current real estate market before new inventory comes to market. If you are considering selling your house or would like to know your options, let’s get together today to help you understand the possibilities available to you!
Looking to Upgrade Your Current Home? Now’s the Time to Move-Up!
In every area of the country, homes that are priced at the top 25% of the price range for that area are considered to be Premium Homes. In today’s real estate market there are deals to be had at the higher end! This is great news for homeowners who want to upgrade from their current house and move-up to a premium home.
Much of the demand for housing over the past couple years has come from first-time buyers looking for their starter home, which means that many of the more expensive homes that have been listed for sale have not seen as much interest.
This mismatch in demand and inventory has created a Buyer’s Market in the luxury and premium home markets according to the ILHM’s latest Luxury Report. For the purpose of the report, a luxury home is defined as one that costs $1 million or more.
“A Buyer’s Market indicates that buyers have greater control over the price point. This market type is demonstrated by a substantial number of homes on the market and few sales, suggesting demand for residential properties is slow for that market and/or price point.”
The authors of the report were quick to point out that the current conditions at the higher end of the market are no cause for concern,
“While luxury homes may take longer to sell than in previous years, the slower pace, increased inventory levels and larger differences between list and sold prices, represent a normalization of the market, not a downturn.”
Luxury can mean different things to different people. It could mean a secluded home with a ton of property for privacy to one person, or a penthouse in the center of it all for someone else. Knowing what characteristics you are looking for in a premium home and what luxury means to you will help your agent find your dream home.
If you are debating upgrading your current house to a premium or luxury home, now is the time!