property management Archives

Should Today’s Buyer Expect To Pay Above Asking?

Even if you’ve never purchased a house before, you likely know that – unlike buying a hammer at the hardware store – a home’s price is up for negotiation. Depending on market conditions, a home seller may be willing to sell for less than their asking price or, if they’ve got a number of offers, may expect to get more than they asked for. Either way, knowing what to expect when you start your home search can help you set your budget and limits before you’re competing with another buyer for a home you love. In other words, it’s smart to plan ahead. And, if this year is anything like last year, you might want to plan for competition. That’s because, new research shows nearly a quarter of all homes sold last year sold for above their list price. In fact, on average, homes sold for $7,000 more than what they were listed at. However, this isn’t true for all markets. For example, home buyers in cities like Orlando and Phoenix were far less likely to pay above asking price than buyers in markets like San Francisco and Seattle. More here.

Mortgage Demand Jumps Following Holidays

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates held steady again last week, with little change for 30-year fixed-rate mortgages with conforming loan balances. But, though not moved from the previous week, rates are lower than they were at the same time last year. That, and some pent-up demand from the holidays, led to a spike in mortgage application demand last week. In fact, total application volume was up 8.3 percent during the first week of 2018. Joel Kan, MBA economist, told CNBC mixed economic news kept rates steady. “For example, the ISM’s non-manufacturing index showed that growth in the services sector was down for the second month, and the BLS’ December jobs report was weaker than expected,” Kan said. “However, these were partially offset by slightly stronger factory orders for November and continued optimism of positive impacts from the tax reform plan.” In short, economic conditions have kept rates steady for the past several weeks and borrowers finally took advantage last week. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Luxury Home Listings Up 4% Year-Over-Year

The luxury home market didn’t suffer the effects of the housing crash as severely as the rest of the market. It also rebounded faster. But, according to new research, there are a growing number of luxury listings and the additional inventory is changing conditions for buyers and sellers. In fact, the number of luxury home listings rose 4 percent in 2017 over the year before. As a result, prices for luxury homes increased 5.1 percent last year, compared to the 6.9 percent increase the overall market experienced. Luxury properties also took longer to sell than they did the year before. Javier Vivas, director of economic research with the National Association of Realtors, says the market is strong but supply is beginning to outpace buyer demand. “Although 2017 was another strong year for the luxury housing market, it was once again outperformed by the US market overall,” Vivas said. “Age of inventory in the top 5 percent of the market slowed significantly over last year – a tell tale sign that the supply in the luxury sector continues to outpace demand.” In other words, home buyers interested in buying a luxury home, as either a primary or secondary residence, may find more choices, opportunities, and balance among the housing market’s most expensive homes. More here.

Americans More Optimistic About This Year’s Market

Americans feel better about the housing market than at the beginning of last year, according to the most recent Housing Purchase Sentiment Index from Fannie Mae. The index measures Americans’ perception of buying and selling a house, mortgage rates, prices, and their own financial stability. The most recent results show an increase in confidence since last year but a slight weakening from the month before. Doug Duncan, Fannie Mae’s chief economist, says affordability is still the main challenge. “Consumers remained cautious in their housing outlook at the end of 2017, as tax reform discussions continued,” Duncan said. “Entering 2018, housing affordability remains a persistent challenge, particularly in rental markets, where consumer expectations for price increases over the next 12 months reached a new survey high.” Still, according to most forecasts, this year’s real-estate market – though not that different from last year’s – should benefit from an increase in new home construction, which may help keep prices from climbing as quickly as they have been. More here.

Analyst Says Don’t Expect Big Changes In 2018

Housing market fundamentals have been relatively steady, for some time now. Mortgage rates have been low by historical standards, prices have been rising, and inventory has been down. All three of these factors, combined with a growing economy and stronger job market, have kept the real-estate market in a kind of limbo. While the economy and favorable mortgage rates have helped drive buyer demand, there have also been fewer homes for sale, which helps push prices upward. In other words, there are a lot of positives but there are also challenges. Freddie Mac economist, Leonard Kiefer, says this year’s market will likely continue along the same path – though he predicts some improvement. “Income growth should remain positive, but not enough to offset the other factors affecting home buyer affordability,” Kiefer wrote in a recent article. “We’re expecting that interest rates will remain low, but gradually move higher. Housing construction should gradually pick up, helping to supply more homes to inventory-starved markets. More housing supply and modestly higher rates will lead to a moderation in house price growth.” More here.

Credit Score Data A Reminder To Keep Good Habits

Keeping good financial habits is important, especially if you’re expecting to buy a house any time soon. That’s because, your credit history and score will be among the tools your lender uses to determine whether or not you’re qualified for a mortgage. In other words, making sure your credit score is as good as it can be should be a top priority for prospective home buyers. But, though that’s true, last year saw a drop in average credit scores among borrowers. In fact, numbers from Ellie Mae show borrowers’ average FICO score dropped from 728 to 722 year-over-year in November. The good news is that that’s a significant improvement over where it was a few years ago. It’s also, however, a reminder to practice good financial habits, pay your bills on time, and check your credit history for any fixable errors. Joe Tyrell, Ellie Mae’s president of corporate strategy, says the news is encouraging, despite the drop. “With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market,” Tyrell said. “While these scores are still significantly above levels seen a few years ago, it is encouraging to see increased accessibility especially as the millennial population continues to pursue home ownership.” More here.

Homeownership Seen As Path To Financial Security

There’s no shortage of opinions, these days. Which means, you’ve probably heard varying viewpoints on whether or not buying a house is really a smart investment. Especially following the housing crash, it became more popular to say that buying a home may not, in fact, be a better financial choice than renting. But despite the debate, recent research shows that the vast majority of Americans still see homeownership as a path to increased financial security. For example, a recent survey from NeighborWorks found 81 percent of all adults and 71 percent of millennials believe owning a home is good for financial stability. Among the reasons this remains true is the fact that, unlike rent, your monthly mortgage payment is actually buying you an increasing percentage of ownership in your home. As you build up a larger share of ownership and your equity increases, so does your net worth – making homeownership an excellent way of investing in something long term while also enjoying the immediate benefits. More here.

The Total Value Of All The Homes In the US

Perhaps you’ve never thought about how much all the homes in the country would cost if their values were totaled. But, according to recently released data from Zillow, that number is now $31.8 trillion – and that’s up $2 trillion from the year before. Zillow senior economist Aaron Terrazas says the national housing stock hit record heights in 2017. “Strong demand from buyers and the ongoing inventory shortage keep pushing values higher, especially in some of the nation’s booming coastal markets,” Terrazas said. In fact, the New York and Los Angeles markets alone account for more than 8 percent of the value of all U.S. housing. According to the report, each are now worth more than $2.5 trillion. Among the cities seeing the most rapid growth, Columbus led the way, with a 15.1 percent increase – though San Jose, Dallas, Seattle, Tampa, Las Vegas, and Charlotte also grew by more than 10 percent over the past year. More here.

Skyrocketing New Home Sales Beat Expectations

New home sales are an important barometer for the housing market for a number of reasons. For one, the more new homes that sell, the more new homes builders will build. And, as more new homes get added to the number of homes for sale, home prices will begin to moderate, as there are more homes for buyers to choose from. In other words, new home sales affect anyone buying or selling a home, regardless of whether they’re specifically interested in a newly built home. Because of that, news that new home sales rose 17.5 percent in November is encouraging for potential buyers and sellers interested in getting into the market in the coming months. That’s because strained affordability conditions will be helped by an increase in the number of new homes being sold and, even more importantly, the number of new homes that are built in the coming year. The monthly improvement also far exceeded economists’ expectations. In fact, economists polled by Reuters had predicted sales would fall 4.7 percent. More here.

Home Sales Reach Strongest Pace Since 2006

Sales of previously owned homes rose for the third straight month in November, according to new numbers from the National Association of Realtors. The improvement put home sales at their strongest pace since 2006 and 3.8 percent above where they were at this time last year. Lawrence Yun, NAR’s chief economist, says the economy is fueling increased interest in buying a home. “Faster economic growth in recent quarters, the booming stock market, and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end,” Yun said. However, despite the overall improvement, there are still a lower-than-usual number of first-time home buyers active in the market. This is primarily due to the fact that there are more homes available for sale at the high end of the market than in the more affordable price ranges popular with new buyers. Yun says new construction is the answer. “The increase in homebuilder optimism must translate to significantly more new construction in 2018 to help ease these acute inventory shortages,” he said.