Tips for Today’s Sellers
Tips for Today’s Sellers
Even in today’s ultimate sellers’ market, it’s key to have an expert guide when you sell your house. Let’s connect to optimize your home sale this summer.
Don’t Wait To Sell Your House
Don’t Wait To Sell Your House
We’re in the ultimate sellers’ market right now. If you’re a homeowner thinking about selling, you have a huge advantage in today’s housing market. High buyer demand paired with very few houses for sale makes this the optimal time to sell for those who are ready to do so. Whatever the move you want to make looks like, here’s an overview of what’s creating the prime opportunity to sell this summer.
High Buyer Demand
Demand is strong, and buyers are actively searching for homes to purchase. In the Realtors Confidence Index Survey published monthly by the National Association of Realtors (NAR), buyer traffic is considered “very strong” in almost every state. Homebuyers aren’t just great in number right now – they’re also determined to find their dream home. NAR shows the average home for sale today receives five offers from hopeful buyers. These increasingly frequent bidding wars can drive up the price of your house, which is why high demand from competitive homebuyers is such a win for this summer’s sellers.
Low Inventory of Houses for Sale
Purchaser demand is so high, the market is running out of available homes for sale. Danielle Hale, Chief Economist at realtor.com, explains:
“For most sellers listing sooner rather than later could really pay off with less competition from other sellers and potentially a higher sales price… They’ll also avoid some big unknowns lurking later in the year, namely another possible surge in COVID cases, rising interest rates and the potential for more sellers to enter the market.”
NAR also reveals that unsold inventory sits at a 2.4-months’ supply at the current sales pace. This is far lower than the historical norm of a 6.0-months’ supply. Homes are essentially selling as fast as they’re hitting the market. Below is a graph of the existing inventory of single-family homes for sale:
At the same time, homebuilders are increasing construction this year, but they can’t keep up with the growing demand. While reporting on the inventory of newly constructed homes, the U.S. Census Bureau notes:
“The seasonally‐adjusted estimate of new houses for sale at the end of April was 316,000. This represents a supply of 4.4 months at the current sales rate.”
What Does This Mean for You?
If you’re thinking of putting your house on the market, don’t wait. A seller will always negotiate the best deal when demand is high and supply is low. That’s exactly what’s happening in the real estate market today.
Bottom Line
As vaccine rollouts progress and we continue to see the economy recover, more houses will come to the market. Don’t wait for the competition in your neighborhood to increase. If you’re ready to make a move, now is the time to sell. Let’s connect today to get your house listed at this optimal moment in time.
Today’s mortgage rates are still incredibly low compared to the historical norm. Let’s connect so you can strike while the iron is hot.
There’s Still Time To Take Advantage of Historically Low Mortgage Rates
Today’s mortgage rates are still incredibly low compared to the historical norm. Let’s connect so you can strike while the iron is hot.
Why You May Want To Cash in on Your Second Home
Why You May Want To Cash in on Your Second Home
When stay-at-home mandates were enforced last year, many households realized their homes didn’t really fulfill their new lifestyle needs. An office (in some cases two), a media room, space for children to learn, a gym, and a large yard are all examples of amenities that became highly desirable almost overnight.
Zelman & Associates recently reported that sales of primary residences grew by 9% in 2020. That increase in demand was met by the lowest supply of homes for sale in history. High demand and low supply caused prices to skyrocket over the past twelve months. Here are three home price indexes released most recently that show how home values have risen:
- FHFA Agency House Price Index shows a 13.9% increase
- CoreLogic Home Price Insights Report shows an 11.3% increase
- S&P Case-Shiller U.S. National Home Price Index shows a 13.2% increase
Prices increased by double digits in every region of the country and in 19 of 20 major metros. Chicago was the only exception, where prices still rose by 9%.
What does this mean to those who purchased a second home during the pandemic?
Many people didn’t want to give up a home in the city or close to their office. Instead, they purchased a larger second home farther away and moved there to stay safe and have more space. According to the same Zelman report, sales for second homes rose an astonishing 27% in 2020.
That large second-home retreat on a lake or in the mountains would demand a higher price than the average house. Let’s assume a buyer purchased such a home for $500,000. Assuming the middle 13.2% appreciation shown above, that home would now be worth about $566,000.
Those who bought second homes to improve their lifestyle during the height of the pandemic, or those who just wanted to be in a safer environment, also made a great investment.
What should these homeowners do now as the pandemic is receding, and the economy is reopening?
The buyers of those second homes now have a decision to make. Many will move back to the original home they still own (the one that’s closer to work, friends, and family). Should they keep the second home? That could depend on answers to questions like these:
- Now that you may have to go back to the office (at least a few days a week) and students are required to physically attend school, would you still use the second house enough to warrant the expenses of an additional home?
- Would you go to the second home on most weekends, or would you return to the movie theater, attend sporting events, eat out at fine restaurants, or spend your time traveling again?
Bottom Line
If you purchased a larger second home during the pandemic, you were able to make day-to-day life much easier for those important to you. You also made it much safer. However, with those goals already accomplished, you now need to decide whether to continue paying the extra expenses or sell the house and cash in your profit. If you decide selling makes sense, let’s connect today to discuss the value of your second home.
Marty Gale CNE,MCNE,SFR,CRS,CPRES,CDPE,E-PRO,SRES,ABR, Principal Broker, 801-205-3500
One last thing! I am looking for people that you want to refer me that you care about. Because they deserve to get the best advice possible when it’s time for them to make a decision who to use in Real Estate.
Buying a Home Is Still Affordable
Buying a Home Is Still Affordable
The last year has put emphasis on the importance of one’s home. As a result, some renters are making the jump into homeownership while some homeowners are re-evaluating their current house and considering a move to one that better fits their current lifestyle. Understanding how housing affordability works and the main market factors that impact it may help those who are ready to buy a home narrow down the optimal window of time in which to make a purchase.
There are three main factors that go into determining how affordable homes are for buyers:
- Mortgage Rates
- Mortgage Payments as a Percentage of Income
- Home Prices
The National Association of Realtors (NAR) produces a Housing Affordability Index. It takes these three factors into account and determines an overall affordability score for housing. According to NAR, the index:
“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”
Their methodology states:
“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”
So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:
The blue bar represents today’s affordability. We can see that homes are more affordable now than they’ve been at any point since the housing crash when distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market for almost one hundred years.
Why are homes so affordable today?
Although there are three factors that drive the overall equation, the one that’s playing the largest part in today’s homebuying affordability is historically low mortgage rates. Based on this primary factor, we can see that it’s more affordable to buy a home today than at any time in the last eight years.
If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.
Bottom Line
If you feel ready to buy, purchasing a home this summer may save you a significant amount of money over time based on historical affordability trends. Let’s connect today to determine if now is the right time for you to make your move.
3 Things To Prioritize When Selling Your House
3 Things To Prioritize When Selling Your House
Today’s housing market is full of unprecedented opportunities. High buyer demand paired with record-low housing inventory is creating the ultimate sellers’ market, which means it’s a fantastic time to sell your house. However, that doesn’t mean sellers are guaranteed success no matter what. There are still some key things to know so you can avoid costly mistakes and win big when you make a move.
1. Price Your House Right
When inventory is low, like it is in the current market, it’s common to think buyers will pay whatever we ask when setting a listing price. Believe it or not, that’s not always true. Even in a sellers’ market, listing your house for the right price will maximize the number of buyers that see your house. This creates the best environment for bidding wars, which in turn are more likely to increase the final sale price. A real estate professional is the best person to help you set the best price for your house so you can achieve your financial goals.
2. Keep Your Emotions in Check
Today, homeowners are living in their houses for a longer period of time. Since 1985, the average time a homeowner owned their home, or their tenure, has increased from 5 to 10 years (See graph below):
This is several years longer than what used to be the historical norm. The side effect, however, is when you stay in one place for so long, you may get even more emotionally attached to your space. If it’s the first home you purchased or the house where your children grew up, it very likely means something extra special to you. Every room has memories, and it’s hard to detach from that sentimental value.
For some homeowners, that connection makes it even harder to separate the emotional value of the house from the fair market price. That’s why you need a real estate professional to help you with the negotiations along the way.
3. Stage Your House Properly
We’re generally quite proud of our décor and how we’ve customized our houses to make them our own unique homes. However, not all buyers will feel the same way about your design and personal touches. That’s why it’s so important to make sure you stage your house with the buyer in mind.
Buyers want to envision themselves in the space so it truly feels like it could be their own. They need to see themselves inside with their furniture and keepsakes – not your pictures and decorations. Stage, clean, and declutter so they can visualize their own dreams as they walk through each room. A real estate professional can help you with tips to get your home ready to stage and sell.
Bottom Line
Today’s sellers’ market might be your best chance to make a move. If you’re considering selling your house, let’s connect today so you have the expert guidance you need to navigate through the process and prioritize these key elements.
Why Is This Spring a Great Time to Sell Your House?
Why Is This Spring a Great Time to Sell Your House?
Your House Could Be the Oasis in an Inventory Desert
Your House Could Be the Oasis in an Inventory Desert
Homebuyers are flooding the housing market right now to take advantage of record-low mortgage rates. Many have a sense of urgency to find a home soon since experts forecast a steady rise in both rates and home prices this year and next. As a result, buyer demand greatly outweighs the current housing supply. Here’s how the shortage of houses for sale sets yours up to be the oasis in an inventory desert.
According to the National Association of Realtors (NAR), today’s housing inventory sits at an incredibly low 2.1-month supply, far below the 6-month mark for a neutral market. Inventory of single-family homes a year ago was already very low, and as you can see in the graph below, this year’s levels are even lower:
Due to these market conditions, today’s buyers frequently enter fierce bidding wars while trying to purchase a home. This in turn drives up home prices and gives sellers incredible leverage in the negotiation process, two big wins if you’re going to sell your house this year.
Bottom Line
In such a hot market, it can feel as though the supply of homes has virtually dried up, leaving buyers to wander in an inventory desert. That’s why there’s never been a better time to sell. To a parched buyer needing to secure a home as soon as possible, your house could be a true oasis.
It’s Not Too Late To Apply For Forbearance
It’s Not Too Late To Apply For Forbearance
Over the past year, the pandemic made it challenging for some homeowners to make their mortgage payments. Thankfully, the government initiated a forbearance program to provide much-needed support. Unless they’re extended once again, some of these plans and the corresponding mortgage payment deferral options will expire soon. That said, there’s still time to request assistance. If your loan is backed by HUD/FHA, USDA, or VA, you can apply for initial forbearance by June 30, 2021.
Recently, the Consumer Finance Institute of the Federal Reserve Bank of Philadelphia surveyed a national sample of 1,172 homeowners with mortgages. They discussed their familiarity with and understanding of lender accommodations that might be available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The results indicate that some borrowers didn’t take advantage of the support available through forbearance:
“Most borrowers who had not used forbearance during the pandemic reported that it was because they simply did not need it. However, among the remainder, a lack of understanding about available accommodations may also be playing a role. Around 2 out of 3 in this group reported not seeking forbearance because they were unsure or pessimistic about whether they would qualify — even though a high fraction of borrowers are eligible for forbearance under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.”
Here are some of the reasons why those borrowers didn’t opt for forbearance:
- They were concerned forbearance may be costly
- They didn’t understand how to request forbearance
- They didn’t understand how the plans worked and/or whether they would qualify
If you have similar questions or concerns, the following answers may ease your fears.
If you’re concerned forbearance may be costly:
The Consumer Financial Protection Bureau (CFPB) explains:
“For most loans, there will be no additional fees, penalties, or additional interest (beyond scheduled amounts) added to your account, and you do not need to submit additional documentation to qualify. You can simply tell your servicer that you have a pandemic-related financial hardship.”
It’s important to contact your mortgage provider (the company you send your mortgage payment to every month) to explain your current situation and determine the best plan available for your needs.
If you’re not sure how to request forbearance:
Here are 5 steps to follow when requesting mortgage forbearance:
- Find the contact information for your servicer
- Call your servicer
- Ask if you’re eligible for protection under the CARES Act
- Ask what happens when your forbearance period ends
- Ask your servicer to provide the agreement in writing
If you don’t understand how the plans work and/or whether you will qualify:
This is how the Consumer Financial Protection Bureau (CFPB) explains the program:
“Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances…
Forbearance doesn’t mean your payments are forgiven or erased. You are still obligated to repay any missed payments, which, in most cases, may be repaid over time or when you refinance or sell your home. Before the end of the forbearance, your servicer will contact you about how to repay the missed payments.”
The CFPB also addresses who qualifies for forbearance relief:
“You may have a right to a COVID hardship forbearance if:
- You experience financial hardship directly or indirectly due to the coronavirus pandemic.
- You have a federally backed mortgage, which includes HUD/FHA, VA, USDA, Fannie Mae, and Freddie Mac loans.
For mortgages that are not federally backed, servicers may offer similar forbearance options. If you are struggling to make your mortgage payments, servicers are generally required to discuss payment relief options with you, whether or not your loan is federally backed.”
Bottom Line
Like many Americans, your home may be your biggest asset. By acting quickly, you might be able to take advantage of critical relief options to help keep you in your home. Even if you tried to apply at the beginning of the pandemic and for some reason it didn’t work out, try again. Contact your mortgage provider today to determine if you qualify. If you have additional concerns, let’s connect to answer your questions and determine if there are other mortgage relief options in our area as well.
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