Recently there has been a lot of talk about home prices and if they are accelerating too quickly. As we mentioned before, in some areas of the country, seller supply (homes for sale) cannot keep up with the number of buyers out looking for a home, which has caused prices to rise. The great news about rising prices, however, is that according to CoreLogic’s US Economic Outlook, the average American household gained over $11,000 in equity over the course of the last year, largely due to home value increases. The map below was created using the same report from CoreLogic and shows the average equity gain per mortgaged home from June 2015 to June 2016 (the latest data available).
For those who are worried that we are doomed to repeat 2006 all over again, it is important to note that homeowners are investing their new-found equity in their homes and themselves, not in depreciating assets. The added equity is helping families put their children through college, invest in starting small businesses, allowing them to pay off their mortgage sooner or move up to the home that will better suit their needs now.
CoreLogic predicts that home prices will appreciate by another 5% by this time next year. If you are a homeowner looking to take advantage of your home equity by moving up to your dream home, contact an agent in your area to discuss your options!
Category: MARKET TRENDS & STATS
It is common knowledge that a large number of homes sell during the spring-buying season. For that reason, many homeowners hold off on putting their homes on the market until then. The question is whether or not that will be a good strategy this year. The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring, as compared to the rest of the year? The National Association of Realtors (NAR) recently revealed the months in which most people listed their homes for sale in 2016. Here is a graphic showing the results:
The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,820,000.
That number spiked to 2,140,000 by May!
What does this mean to you?
With the national job situation improving, and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring; they are out looking for a home right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition for a buyer.
It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home today.
Go with the Orland Park real estate leader!
Coldwell Banker Residential Brokerage continues to sell more properties in Orland Park, Illinois than any other brokerage…and more than the next two brokerages combined!
ALSO, Coldwell Banker leads in sales and sales volume in Chicagoland as well!
(click to view larger)
Also for the first part of 2016, Coldwell Banker continues to lead in sales volume in Orland Park.
When it comes to real estate in Orland Park, the choice is obvious.
Info based on closed units of the top 6 real estate companies in Chicagoland from the data obtained from Midwest Real Estate Data LLC for the period of January 1, 2016 – June 30, 2016. Neither CBRB or any MLS guarantees the accuracy of the data. Data may not reflect all market activity.
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.
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.
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.
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).
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.
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.
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!