In a recent survey of home sellers by Qualtrics, 87% of respondents said they were concerned their home won’t sell because of the pandemic and resulting economic recession. Of the respondents, 51% said they are “seriously worried.” That concern seems reasonable considering the current condition of the economy. The data, however, is showing that home purchasers are still very active despite the disruptions American families have experienced this year.
The latest Existing Home Sales Report published by the National Association of Realtors (NAR) revealed that 340,000 single-family homes sold in this country last month. NAR’s most recent Pending Sales Report (homes going into contract) surpassed last month’s number by over 44%, which far exceeded analysts’ projections of 15%. ShowingTime reported that appointments to see homes (both virtually and in-person) have increased in every region of the country and are up 21.4% nationwide over the same time last year.
While buyer activity is surging, the number of listings has fallen to an all-time low. Zelman Associates, in their latest residential real estate report, revealed that housing inventory as a percentage of households has fallen to 1.2%, which is half of the long-term average and lower than any other time in our history.
Bidding Wars Heating Up Again
With buyer demand growing and the supply of available homes shrinking, purchasers are again finding themselves needing to outbid other buyers. NAR, in a recent blog post, revealed:
“On average, there were about three offers on a home that closed in May, up from just about two in April 2020 and in May 2019 (2.3 offers).”
Bidding wars guarantee houses sell quickly at a price near or even slightly over the listing price.
If you’re thinking of selling, don’t be concerned about putting your house on the market right now. There’s no better time to sell an item than when demand for it is high and supply is low. It is exactly at that time when you will negotiate your best possible deal.
In today’s fast-paced world where answers are just a Google search away, there are some who may question the benefits of hiring a real estate professional when selling a house. The reality is, the addition of more information can lead to more confusion. A real estate agent can be your essential guide, but truth be told, not all agents are created equal. Finding the right agent for you and your family should be your top priority when you’re ready to sell your house.
The right agent is the person who can truly walk you through the whole process, look out for your best interest, and seamlessly lead you through all the steps along the way. In today’s complex market, the way we execute real estate transactions is changing constantly, especially as more elements can be done virtually. Making sure you have the best advice on your side is more important than ever.
So, how do you choose the perfect agent?
It starts with trust. You must trust the advice this person is going to give you, and you’ll want to begin by making sure you’re connected to a true professional. An agent can’t give you perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in this unique market. A true professional agent can, however, give you the best advice possible based on the information and situation at hand, helping you make the necessary adjustments and best decisions along the way. The right agent – the professional – will get you the best offer available. That’s exactly what you want and deserve.
What do you need to trust your agent to do?
1. Navigate the Process
There are over 230 possible steps that take place during a successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to ensure you have a positive selling experience?
2. Negotiate on Your Behalf
Today, hiring a trusted and talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step – from the buyer submitting an original offer, to the possible renegotiation of that offer after a home inspection, to the potential cancelation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.
3. Price Your House Competitively
There’s so much information in the news and on the Internet about home sales, prices, and mortgage rates. How do you know what’s going on in our local area? Who do you turn to in order to competitively and correctly price your home at the beginning of the selling process?
Dave Ramsey, known as the financial guru, advises:
“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”
Hiring a trusted professional who has a finger on the pulse of the market and is eager to help you learn will make your experience an informed and educated one. You need someone who’s going to tell you the truth, not just what they think you want to hear.
Today’s real estate market is highly competitive. Having a trusted professional who’s been there before to guide you through the process is a simple step that will give you a huge advantage when you’re ready to sell your house. Let’s make it happen together.
With businesses reopening throughout the country and some experts indicating early signs of a much-anticipated economic recovery, more homebuyers are actively entering the housing market this summer. Today, housing is truly driving the U.S. economy forward. With so many buyers looking for homes to purchase and so few houses for sale right now, there’s a disconnect between supply and demand. This imbalance is pushing home prices upward while driving more bidding wars and multiple-offer scenarios. Danielle Hale, Chief Economist at realtor.com explains:
“People are surprised that prices are rising, not falling, because in the last recession home prices fell, the difference this time is the severe shortage of homes for sale…We are seeing bigger price increases with [a limited] number of homes…That is likely to lead to more competition and potentially multiple offers and bidding wars.”
According to the recent Realtors Confidence Index (RCI) survey conducted by the National Association of Realtors (NAR), this trend is growing:
“On average, there were about three offers on a home that closed in May, up from just about two in April 2020 and in May 2019 (2.3 offers).”
HousingWire also indicates:
“42% of homeowners who made a purchase during the January to May time period ended up in a bidding war, demonstrating the strong demand for homes amid low inventory.”
With more people returning to work we’ll continue to see the number of interested buyers increase. So, if you’re among the many people looking for a home to buy this summer, it’s important to ensure you have the right guidance from the start. This way, you make sure your offer stands out from the crowd when it really counts. Here are two tips to follow.
1. Hire a Trusted Local Expert
A trusted local real estate professional matters more than ever right now, as noted in a recent survey shared by NAR. In fact, according to respondents, 54% of buyers and 62% of sellers indicated that “Particularly during the pandemic, a real estate agent’s guidance is especially valued.”
We’re not in a normal market. We are in one of the greatest health crises our nation has ever seen. The pandemic has had a dramatic impact on the journey consumers must take to purchase a home. To successfully navigate the landscape today, you need a true expert on your side.
2. Get Pre-Approved for a Mortgage
When there are more buyers than sellers on the market, the process to find a home becomes much more challenging. One way to show you’re serious about buying a home is to work with a lender to get pre-approved for a mortgage before starting your search. With a pre-approval letter, sellers will see your true desire to buy this year, potentially helping your offer rise to the top.
If this is the year you’re ready to buy, let’s connect to get the process started so you can make sure your offer is a strong one when the competition heats up.
Last week, a very well-respected real estate analytics firm surprised many with their home price projection for the next twelve months. CoreLogic, in their latest Home Price Index said:
“The economic downturn that started in March 2020 is predicted to cause a 6.6% drop in the HPI by May 2021, which would be the first decrease in annual home prices in over 9 years.”
The forecast was surprising as it was strikingly different than any other projection by major analysts. Six of the other eight forecasts call for appreciation, and the two who project depreciation indicate it will be one percent or less.
Here is a graph showing all of the projections:There’s a simple formula to determine the future price of any item: calculate the supply of that item in ratio to the demand for that item. In housing right now, demand far exceeds supply. Last week mortgage applications to buy a home were 33% higher than they were at the same time last year. The available inventory of homes for sale is 31% lower than it was last year. Normally, these numbers should call for homes to continue to appreciate.
Because of the uncertainty with the pandemic, any economic prediction is extremely difficult. However, looking at the limited supply of homes for sale and the tremendous demand for housing, it is difficult to disagree with the majority of analysts who are calling for price appreciation.
- National Homeownership Month is a great time to reflect on how we can each promote stronger community growth.
- Homeownership helps families build financial freedom, find greater happiness and satisfaction, and make a positive impact on our local communities.
- Let’s connect today if homeownership is part of your future plans.
There are many benefits to working with a real estate professional when selling your house. During challenging times like the one we face today, it becomes even more important to have an expert help guide you through the process. If you’re considering selling on your own, known in the industry as a For Sale By Owner or FSBO, please consider the following:
1. Your Safety Is a Priority
During this pandemic, your family’s safety comes first. When you FSBO, it is incredibly difficult to control entry into your home. A real estate professional will have the proper protocols in place to protect not only your belongings, but your family’s health and well-being too. From regulating the number of people in your home at one time to ensuring proper sanitization during and after a showing, and even facilitating virtual tours for buyers, agents are equipped to follow the latest industry standards recommended by the National Association of Realtors (NAR) to help protect you and your family.
2. A Powerful Online Strategy Is a Must to Attract a Buyer
Recent studies have shown that, even before COVID-19, the first step 44% of all buyers took when looking for a home was to search online. Throughout the process, that number jumped to 93%. Today, those numbers have grown exponentially. Most real estate agents have developed a strong Internet and social media strategy to promote the sale of your house. Have you?
3. There Are Too Many Negotiations
Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:
- The buyer, who wants the best deal possible
- The buyer’s agent, who solely represents the best interest of the buyer
- The inspection companies, which work for the buyer and will almost always find challenges with the house
- The appraiser, if there is a question of value
As part of their training, agents are taught how to negotiate every aspect of the real estate transaction and how to mediate the emotions felt by buyers looking to make what is probably the largest purchase of their lives.
4. You Won’t Know if Your Purchaser Is Qualified for a Mortgage
Having a buyer who wants to purchase your house is the first step. Making sure they can afford to buy it is just as important. As a FSBO, it’s almost impossible to be involved in the mortgage process of your buyer. A real estate professional is trained to ask the appropriate questions and, in most cases, will be intimately aware of the progress that’s being made toward a purchaser’s mortgage commitment.
Further complicating the situation is how the current mortgage market is rapidly evolving because of the number of families out of work and in mortgage forbearance. A loan program that was there yesterday could be gone tomorrow. You need someone who is working with lenders every day to guarantee your buyer makes it to the closing table.
5. FSBOing Has Become More Difficult from a Legal Standpoint
The documentation involved in the selling process has increased dramatically as more and more disclosures and regulations have become mandatory. In an increasingly litigious society, the agent acts as a third-party to help the seller avoid legal jeopardy. This is one of the major reasons why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
6. You Net More Money When Using an Agent
Many homeowners believe they’ll save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, the seller may even net less money from the sale. The study found the difference in price between a FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure:
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”
The more buyers that view a home, the greater the chance a bidding war will take place.
Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent and still net the same amount of money? Before you decide to take on the challenge of selling your house alone, let’s connect to discuss your options.
One of the biggest questions we all seem to be asking these days is: When are we going to start to see an economic recovery? As the country begins to slowly reopen, moving forward in strategic phases, business activity will help bring our nation back to life. Many economists indicate a recovery should begin to happen in the second half of this year. Here’s a look at what some of the experts have to say.
“I think there’s a good chance that there’ll be positive growth in the third quarter. And I think it’s a reasonable expectation that there’ll be growth in the second half of the year…
So, in the long run, I would say the U.S. economy will recover. We’ll get back to the place we were in February; we’ll get to an even better place than that. I’m highly confident of that. And it won’t take that long to get there.”
“The economy is expected to begin recovering during the second half of 2020 as concerns about the pandemic diminish and as state and local governments ease stay-at-home orders, bans on public gatherings, and other measures. The labor market is projected to materially improve after the third quarter; hiring will rebound and job losses will drop significantly as the degree of social distancing diminishes.”
“I think we need to prepare for a more gradual recovery while we hope for that quicker rebound.”
We’re certainly not out of the woods yet, but clearly many experts anticipate we’ll see a recovery starting this year. It may be a bumpy ride for the next few months, but most agree that a turnaround will begin sooner rather than later.
During the planned shutdown, as the economic slowdown pressed pause on the nation, many potential buyers and sellers put their real estate plans on hold. That time coincided with the traditionally busy spring real estate season. As we look ahead at this economic recovery and we begin to emerge back into our communities over the coming weeks and months, perhaps it’s time to think about putting your real estate plans back into play.
The experts note a turnaround is on the horizon, starting as early as later this year. If you paused your 2020 real estate plans, let’s connect today to determine how you can re-engage in the process as the country reopens and the economy begins a much-anticipated rebound.
In a normal housing market, whether you’re buying or selling a home, you need an experienced guide to help you navigate through the process. You need someone you can turn to who will tell you how to price your home correctly right from the start. You need someone who can help you determine what to offer on your dream home without paying too much or offending the seller with a low-ball offer.
We are, however, in anything but a normal market right now. We are amid one of the greatest health crises our nation has ever seen. The pandemic has had a dramatic impact on the journey consumers take to purchase or sell a home. To successfully navigate the landscape today, you need more than an experienced guide. You need a ‘Real Estate Sherpa.’
According to Lexico, a Sherpa is a “member of a Himalayan people living on the borders of Nepal and Tibet, renowned for their skill in mountaineering.” Sherpas are skilled in leading their parties through the extreme altitudes of the peaks and passes in the region – some of the most treacherous trails in the world. They take pride in their hardiness, expertise, and experience at very high altitudes.
They are much more than just guides.
This is much more than a normal real estate market.
Today, the average guide just won’t do. You need a Sherpa. You need an expert who understands how COVID-19 is impacting the thoughts and actions of the consumer (ex: virtual showings, proper safety protocols, e-signing documents). You need someone who can simply and effectively explain the changes in today’s process to you and your family. You need an expert who will guarantee you make the right decision, especially in these challenging times.
Hiring an agent who understands how the pandemic is reshaping the real estate processes is crucial right now. Let’s connect today to guarantee your journey is a safe and successful one.
With stay-at-home orders starting to gradually lift throughout parts of the country, data indicates homebuyers are jumping back into the market. After many families put their plans on hold due to the COVID-19 pandemic, what we once called the busy spring real estate season is shifting into the summer. In 2020, summer is the new spring for real estate.
Joel Kan, Economist at The Mortgage Bankers Association (MBA) notes:
“Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks…Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”
Additionally, according to Google Trends, which scores search terms online, searches for real estate increased from 68 points the week of March 15th to 92 points last week. As we can see, more potential homebuyers are looking for homes virtually.
What’s the Opportunity for Buyers?
Another reason buyers are coming back to the market, even with forced unemployment and stay-at-home orders, is historically low mortgage rates. Sam Khater, Chief Economist at Freddie Mac indicates:
“For the fourth consecutive week, the 30-year fixed-rate mortgage has been below 3.30 percent, giving potential buyers a good reason to continue shopping even amid the pandemic…As states reopen, we’re seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago.”
With mortgage rates at such low levels and states gradually beginning to reopen, there’s more incentive than ever to buy a home this summer.
What’s the Opportunity for Sellers?
Finding a home to buy, however, is still a challenge, as this spring sellers removed many listings from the market. Though more people are now putting their houses up for sale this month as compared to last month, current inventory is still well below last year’s level.
According to last week’s Weekly Economic and Housing Market Update from realtor.com:
“Weekly Housing Inventory showed continued tightening. New Listings declined 28% compared with a year ago, as sellers grappled with uncertainty and hesitated bringing homes to market. Total Listings dropped 20% YoY, a faster rate than in prior weeks, leaving very few homes available for sale. As Time on Market was 15 days slower YoY, asking prices moved up 1.5% YoY.”
If you’re thinking of selling your house this summer, now may be your best opportunity. With so few homes on the market for buyers to purchase, this season may be the time for your house to stand out from the crowd. Trusted real estate professionals can help you list safely and effectively, keeping your family’s needs top of mind. Buyers are looking, and your house may be at the top of their list.
If you’re thinking of selling, many buyers may be eager to find a home just like yours. Let’s connect today to make sure you can get your house in on the action this summer.
A big challenge facing the housing industry is determining what impact the current pandemic may have on home values. Some buyers are hoping for major price reductions because the health crisis is straining the economy.
The price of any item, however, is determined by supply and demand, which is how many items are available in relation to how many consumers want to buy that item.
In residential real estate, the measurement used to decipher that ratio is called months supply of inventory. A normal market would have 6-7 months of inventory. Anything over seven months would be considered a buyers’ market, with downward pressure on prices. Anything under six months would indicate a sellers’ market, which would put upward pressure on prices.
Going into March of this year, the supply stood at three months – a strong seller’s market. While buyer demand has decreased rather dramatically during the pandemic, the number of homes on the market has also decreased. The recently released Existing Home Sales Report from the National Association of Realtors (NAR) revealed we currently have 3.4 months of inventory. This means homes should maintain their value during the pandemic.
This information is consistent with the research completed by John Burns Real Estate Consulting, which recently reported:
“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices).”
What are the experts saying?
Here’s a look at what some experts recently reported on the matter:
“Supported by our analysis of home price dynamics through cycles and other periods of economic and housing disruption, we expect home price appreciation to decelerate from current levels in 2020, though easily remain in positive territory year over year given the beneficial factors of record-low inventories & a historically-low interest rate environment.”
“The fiscal stimulus provided by the CARES Act will mute the impact that the economic shock has on house prices. Additionally, forbearance and foreclosure mitigation programs will limit the fire sale contagion effect on house prices. We forecast house prices to fall 0.5 percentage points over the next four quarters. Two forces prevent a collapse in house prices. First, as we indicated in our earlier research report, U.S. housing markets face a large supply deficit. Second, population growth and pent up household formations provide a tailwind to housing demand. Price growth accelerates back towards a long-run trend of between 2 and 3% per year.”
“The housing supply remains at historically low levels, so house price growth is likely to slow, but it’s unlikely to go negative.”
Even though the economy has been placed on pause, it appears home prices will remain steady throughout the pandemic.