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!
Data Says April is the Best Month to List Your Home for Sale
The spring housing market is off to the races! The inventory of homes for sale is increasing, buyers are out in force, and interest rates have remained low, piquing the interest of buyers and sellers previously on the fence about making a move.
New research from realtor.com shows that the first week of April is actually the best time to list your house for sale! The report used “trends in median listing prices, views per property on realtor.com, home price drops, median days on market, and number of listings on the market over the last three years,” to determine a ranking for every week of the year.
Listing your home in the first week of April contributes 14x more property views, 5% less competition from other home sellers, and results in the home being sold 6 days faster!
Below is a graph indicating the average score for each month of the year.
It should come as no surprise that April and May dominate as the top months to sell. The second quarter of the year (April, May, June) is referred to as the Spring Buyers Season, when competition is fierce to find a dream home, often leading to bidding wars.
However, there is one caveat worth mentioning. When broken down by metro, realtor.com noticed that while warmer climates share an overall trend, they have different top sales months. The best month to get the most exposure in Miami, FL, for instance, is August, while in Phoenix, AZ, June leads the charge.
If you’re thinking of selling your home this year, the time to list is NOW! According to the National Association of Realtors, 41% of homes sold last month were on the market for less than 30 days! If you list now, you’ll have a really good chance to sell in April or May, setting yourself up for the most exposure!
Let’s get together to discuss the market conditions in our area to get you the most exposure to the buyers ready and willing to make a move!
20 Tips for Preparing Your House for Sale This Spring [INFOGRAPHIC]
- When listing your house for sale, your top goal will be to get the home sold for the best price possible!
- There are many small projects that you can do to ensure this happens!
- Your real estate agent will have a list of specific suggestions for getting your house ready for market and is a great resource for finding local contractors who can help!
Is Your House Priced To Sell Immediately (PTSI)?
In today’s real estate market, with more houses coming to market every day and eager buyers searching for their dream home, setting the right price for your house is one of the most important things you can do.
According to CoreLogic’s latest Home Price Index, home values have risen at over 6% a year over the past two years, but have started to slow to 4.4% over the last 12 months. By this time next year, CoreLogic predicts that home values will be 4.6% higher.
With prices slowing from their previous pace, homeowners must realize that pricing their homes a little OVER market value to leave room for negotiation will actually dramatically decrease the number of buyers who will see their listing! (see the chart below)Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price their house so that demand for the home is maximized. By doing so, the seller will not be negotiating with a buyer over the price, but will instead have multiple buyers competing with each other over the house.
The key to selling your house in 2019 is making sure your house is Priced To Sell Immediately (PTSI)! That way, your home will be seen by the most buyers and will sell at a great price before more competition comes to market!
If you are debating listing your house for sale, let’s get together to discuss how to price your home appropriately for our area and maximize your exposure this Spring Market!
2 Reports That Say Now Is a Great Time to Sell
Heading into the spring buying market, there are strong trends starting to emerge.
The inventory of homes for sale has increased on a year-over-year basis for eight months in a row. Home price appreciation has continued to grow, although at a slower rate. The homeownership rate has reached heights last seen in 2014, with millennials and Generation X leading the way!
Let’s dive a little deeper into some of the recent reports that have been released and what they mean for the spring buying season!
1. National Association of Realtor’s Existing Home Sales Report
Sales of existing homes were down for the third consecutive month in January. Some of this can be explained by the natural seasonality that the real estate market experiences every year, and some can be explained even further by a lack of homes available for sale on the market.
For the last eight months, the inventory of homes for sale has been higher when compared to the same month the year before. The challenge in the market is the mismatch of the type of home that is available for sale. First-time homebuyers looking for a starter home are often competing with other buyers to stand out, often outbidding each other.
Lawrence Yun, NAR’s Chief Economist, agrees that the market is still experiencing an inventory shortage.
“In particular, the lower end of the market is experiencing a greater shortage, and more home construction is needed.”
The median home price for homes sold in January was $247,500. This is up 2.8% from January 2018 and marks the 83rd consecutive month of year-over-year gains. The 2.8% growth in home prices represents the smallest year-over-year change since February 2012 but is a welcome change for buyers who had feared being priced out of the market.
Days on the Market
Properties that sold in January were on the market for an average of 49 days with 38% of homes on the market for less than a month.
Yun is positive about how today’s market conditions will help buyers this spring,
“Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”
2. NAR’s Pending Home Sales Report
The national Pending Home Sales Index (PHSI) rose 4.6% to 103.2 in January from 98.7 in December. An index score of 100 is considered normal. All four major regions of the country experienced gains in January, with the largest increase coming in the South.
“The PHSI is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.”
Increases in the PHSI often predict increases in the level of home sales in the coming months, which is great news for the housing market leading in to spring! Yun had this to say,
“Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”
The housing market in 2019 will require homeowners to list their house at the right price to attract buyers. If interest rates continue to stay low while wages increase, and more inventory comes to market, 2019 could be one of the best years for home sales in recent history.
No Worries… Home Prices Coming in for a SOFT Landing
Home prices have appreciated considerably over the last five years. This has some concerned that we may be in for another dramatic correction. However, recent statistics suggest home values will not crash as they did a decade ago. Instead, this time they will come in for a soft landing.
The previous housing market was fueled by an artificial demand created by mortgage standards that were far too lenient. When this demand was shut off, a flood of inventory came to market. This included heavily discounted distressed properties (foreclosures and short sales).
Today’s market is totally different. Mortgage standards are tighter than they were prior to the last boom and bust. There is no fear that a rush of foreclosures will come to market. The Mortgage Bankers’ Association just announced that foreclosures are lower today than at any time since 1996.
Case Shiller looks at the percentage of appreciation as compared to the same month the year prior. Here is a graph of their findings over the last ten months:
As we can see, home price appreciation is softening as more inventory comes to market. This shows that real estate prices are not crashing, but merely returning toward historic appreciation numbers of 3.6% annually.
Home prices are leveling off. Long term, that is a good thing for the housing market.
2019 Will Be a Great Year for Buyers AND Sellers
Many homeowners believe that rising interest rates and home prices have scared away buyers and therefore have not listed their houses for sale. However, the truth is that buyers who were unable to find a home last year are out in force, and there are even more coming!
NerdWallet’s 2018 Home Buyer Report revealed that:
“Approximately one-third (32%) of Americans plan to purchase a home in the next five years. Millennials are most likely to have such a purchase in their five-year plan (49%), versus 35% of Generation X and 17% of baby boomers.”
As we can see, buyers are optimistic! According to the report, here are the top reasons Americans plan to buy:
The most common reason Americans prioritize buying is that they believe it’s a good investment!
If you’re a homeowner looking to sell, 2019 is the perfect year to put your house on the market. But why?
- Buyers want to buy
- No competition!
At least 3 of the renowned organizations that report on real estate market trends predict that homeowners are going to wait until 2020 to list their homes, leading to a nice increase in sales (as shown in the graph below).
Don’t wait for a competitive market; be ahead of the curve and sell your house at the best possible price!
There are plenty of buyers entering the market! Whether you’re a first-time homebuyer or a current homeowner looking to move-up to your next home, let’s get together to discuss your real estate needs!
How To List Your Home for the Best Price
If your plan for 2019 includes selling your home, you will want to pay attention to where experts believe home values are headed. According to the latest Home Price Index from CoreLogic, home prices increased by 4.7% over the course of 2018.
The map below shows the results of the latest index by state.
Real estate is local. Each state appreciates at different levels. The majority of the country saw at least a 2.0% gain in home values, while some residents in North Dakota and Louisiana may have felt prices slow slightly.
This effect will be short lived. In the same report, CoreLogic forecasts that every state in the Union will experience at least 2.0% appreciation, with the majority of the country gaining at least 4.0%! The prediction for the country comes in at 4.6%. For a median-priced home, that translates to over $14,000 in additional equity next year! (The map below shows the forecast by state.)
So, how does this help you list your home for the best price?
Armed with the knowledge of how much experts believe your house will appreciate this year, you will be able to set an appropriate price for your listing from the start. If homes like yours are appreciating at 4.0%, you won’t want to list your home for more than that amount!
One of the biggest mistakes homeowners make is pricing their homes too high and reducing the price later when they do not get any offers. This can lead buyers to believe that there may be something wrong with the home, when in fact the price was just too high for the market.
Pricing your home right from the start is one of the most challenging parts of selling your home. Once you decide to list your house, let’s get together to discuss where home values are headed in your area!
5 Reasons to Love Hiring A Real Estate Pro [INFOGRAPHIC]
- Hiring a real estate professional to guide you through the process of buying a home or selling your house can be one of the best decisions you make!
- They are there for you to help with contracts, explaining the process, negotiations, and pricing (both when making an offer or setting the right price for your home).
- One of the top reasons to hire a real estate professional is their understanding of your local market and how the conditions in your neighborhood will impact your experience.