NAR (National Association for Realtors®) Reports Show Now Is a Great Time to Sell!

We all realize that the best time to sell anything is when demand is high and the supply of that item is limited. The last two major reports issued by the National Association of Realtors (NAR) revealed information that suggests that now continues to be a great time to sell your house. Let’s look at the data covered by the latest Pending Home Sales Report and Existing Home Sales Report.

THE PENDING HOME SALES REPORT

The report announced that pending home sales (homes going into contract) are up 2.4% over last year, and have increased year-over-year now for 22 of the last 25 consecutive months. Lawrence Yun, NAR‘s Chief Economist, had this to say:

“The one major predicament in the housing market is without a doubt the painfully low levels of housing inventory in much of the country. It’s leading to home prices outpacing wages, properties selling a lot quicker than a year ago and the home search for many prospective buyers being highly competitive and drawn out because of a shortage of listings at affordable prices.”

Takeaway: Demand for housing will continue throughout the end of 2016 and into 2017. The seasonal slowdown often felt in the winter months did not occur last winter and shows no signs of returning this year.

THE EXISTING HOME SALES REPORT

The most important data point revealed in the report was not sales, but was instead the inventory of homes for sale (supply). The report explained:

  • Total housing inventory rose 1.5% to 2.04 million homes available for sale
  • That represents a 4.5-month supply at the current sales pace
  • Unsold inventory is 6.8% lower than a year ago, marking the 16th consecutive month with year-over-year declines

There were two more interesting comments made by Yun in the report:

“Inventory has been extremely tight all year and is unlikely to improve now that the seasonal decline in listings is about to kick in. Unfortunately, there won’t be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”

In real estate, there is a guideline that often applies; when there is less than a 6-month supply of inventory available, we are in a seller’s market and we will see appreciation. Between 6-7 months is a neutral market, where prices will increase at the rate of inflation. More than a 7-month supply means we are in a buyer’s market and should expect depreciation in home values. As Yun notes, we are, and will remain, in a seller’s market with prices still increasing unless more listings come to the market.

“There’s hope the leap in sales to first-time buyers can stick through the rest of the year and into next spring. The market fundamentals — primarily consistent job gains and affordable mortgage rates — are there for the steady rise in first-timers needed to finally reverse the decline in the homeownership rate.”

Takeaway: Inventory of homes for sale is still well below the 6-month supply needed for a normal market. Prices will continue to rise if a ‘sizable’ supply does not enter the market.

Bottom Line

If you are going to sell, now may be the time to take advantage of the ready, willing, and able buyers that are still out looking for your house.

What to Expect When Home Inspecting

What to Expect When Home Inspecting | Keeping Current Matters

So you made an offer, it was accepted, and now your next task is to have the home inspected prior to closing. More often than not, your agent may have made your offer contingent on a clean home inspection. This contingency allows you to renegotiate the price paid for the home, ask the sellers to cover repairs, or even, in some cases, walk away. Your agent can advise you on the best course of action once the report is filed.

How to Choose an Inspector

Your agent will most likely have a short list of inspectors that they have worked with in the past that they can recommend to you. Realtor.com suggests that you consider the following 5 areas when choosing the right home inspector for you:

  1. Qualifications – find out what’s included in your inspection & if the age or location of your home may warrant specific certifications or specialties.
  2. Sample Reports – ask for a sample inspection report so you can review how thoroughly they will be inspecting your dream home. The more detailed the report the better in most cases.
  3. References – do your homework – ask for phone numbers and names of past clients that you can call to ask about their experience.
  4. Memberships – Not all inspectors belong to a national or state association of home inspectors, and membership in one of these groups should not be the only way to evaluate your choice. Often membership in one of these organizations means that there is continued training and education provided.
  5. Errors & Omission Insurance – Find out what the liability of the inspector or inspection company is once the inspection is over. The inspector is only human after all, and it is possible that they might miss something they should have seen.

Ask your inspector if it’s ok for you to tag along during the inspection. That way they can point out anything that should be addressed or fixed. Don’t be surprised to see your inspector climbing on the roof, crawling around in the attic, and on the floors. The job of the inspector is to protect your investment and find any issues with the home, including but not limited to: the roof, plumbing, electrical components, appliances, heating & air conditioning systems, ventilation, windows, the fireplace & chimney, the foundation and so much more!

Bottom Line

They say ‘ignorance is bliss,’ but not when investing your hard-earned money in a home of your own. Work with a professional you can trust to give you the most information possible about your new home so that you can make the most educated decision about your purchase.

Save

Chicago Ranks Among Top Cities For Building Wealth

Bankrate scored 21 major metropolitan markets taking into consideration savable income after taxes, human capital, access to financial services, homeownership rates and debt burdens. Cities have different ways of building wealth. For example, one might have a high cost of home ownership, while one may allow for more savable income after taxes.

map

 

 

 

 

 

 

 

 

 

 

 

Click here to read more and view the original article.

 

 

Save

7 Graphs That Show the Real Estate Market is Back

7 Graphs That Show the Real Estate Market is Back! [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Distressed property sales fell to its lowest number since NAR began tracking it in 2008.
  • As you can see, with less distressed properties, sales are up in all price ranges except the $0 – $100K price range.
  • Interest rates are still at historic lows, signifying that now is the right time to buy!

How Historically Low Interest Rates Increase Your Purchasing Power

How Historically Low Interest Rates Increase Your Purchasing Power | Keeping Current Matters

According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 3.47%. Rates have remained at or below 3.5% each of the last 16 weeks, marking a historic low. The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power. Purchasing power, simply put, is the amount of home you can afford buy for the budget you have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget. The chart below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments at or about $1,100 a month.

How Historically Low Interest Rates Increase Your Purchasing Power | Keeping Current Matters

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5%, (in this example, $6,250). Experts predict that mortgage rates will be closer to 4% by this time next year. Act now to get the most house for your hard earned money.

Mortgage Rates by Decade Compared to Today

Mortgage Rates by Decade Compared to Today [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • The interest rate you secure for your mortgage greatly influences your monthly housing costs.
  • In the 1980s, 30-year fixed mortgage rates averaged in the high 12s making the monthly principal and interest payment over $2,000.
  • Interest rates are still at historic lows; this is a great time lock in your housing cost and protect yourself from increasing rents, or refinance your current mortgage.

Save

Strong Buyer Demand Continues to Outpace Inventory of Homes for Sale

Strong Buyer Demand Continues to Outpace Inventory of Homes for Sale | Keeping Current Matters

The price of any item is determined by the supply of that item, as well as the 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).

Buyer Demand

The map below was created after asking the question: “How would your rate buyer traffic in your area?” Strong Buyer Demand Continues to Outpace Inventory of Homes for Sale | Keeping Current Matters

The darker the blue, the stronger the demand for homes in that area. Only four states came in with a weak or moderate demand level.

Seller Supply

The Index also asked: “How would your rate seller traffic in your area?” As you can see from the map below, the majority of the country has weak Seller Traffic, meaning there are far fewer homes on the market than what is needed to satisfy the buyers who are out looking for their dream homes. Strong Buyer Demand Continues to Outpace Inventory of Homes for Sale | Keeping Current Matters

Bottom Line

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 the 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!

Save