In today’s real estate market, setting the right price for your house is one of the most valuable things you can do.
According to the U.S. Economic Outlook by the National Association of Realtors (NAR), existing home prices nationwide are forecasted to increase 4.7% in 2020 and 4.1% in 2021. This means experts anticipate home values will continue climbing into next year. Today, low inventory is largely keeping prices from depreciating. Danielle Hale, Chief Economist at realtor.com, notes:
“Looking at the sheer number of buyers, low mortgage rates, and limited sellers, the strength of home prices–which are now growing at the highest pace since January 2018–makes sense.”
When it comes to pricing your home, the goal is to increase visibility and drive more buyers your way. Instead of trying to win the negotiation with one buyer, you should price your house so that demand is maximized and more buyers want to take a look.
How to Price Your Home
As a seller, you might be thinking about pricing your house on the high end while so many of today’s buyers are searching harder than ever just to find a home to purchase. You’re thinking, higher price, greater profit, right? But here’s the thing – a high price tag does not mean you’re going to cash in big on the sale. It’s actually more likely to deter buyers and have them looking at the houses your neighbors are selling instead.
Even today, when the advantage tips toward sellers because there are so few houses for sale, your house is more likely to sit on the market longer or require a price drop that can send buyers running in the other direction if it isn’t priced just right.
A Trusted Real Estate Professional Will Help
It’s important to make sure your house is priced correctly by working in partnership with a trusted real estate professional. When you price it competitively, you won’t be negotiating with one buyer over the price. Instead, you’ll have multiple buyers competing for the home, and that’s what ultimately increases the final sale price.
The key is making sure your house is priced to sell immediately. That way, it will be seen by the most buyers. More than one of them may be interested, and your house will be more likely to sell at a competitive price.
If you’re thinking about listing your house this fall, let’s discuss how to price it right so you can maximize your exposure and your return.
If you’re thinking about moving, selling your house this fall might be the way to go. Here are four highlights in the housing market that may make your decision to sell this fall an easy one.
1. Buyers Are Actively in the Market
ShowingTime, a leading real estate showing software and market stat service provider, just reported that buyer traffic jumped 60.7% compared to this time last year. That’s a huge increase.
It’s clear that buyers are ready, willing, and able to purchase – and they’re in the market right now. In many regions of the country, multiple buyers are entering bidding wars to compete for the home they want. Take advantage of the buyer activity currently in the market so you can sell your house in the most favorable terms.
2. There Are Not Enough Homes for Sale
In the latest Existing Home Sales Report, the National Association of Realtors (NAR) announced that there were only 1.49 million units available for sale. That number was down 18.6% from one year ago. This means in the majority of the country, there aren’t enough homes for sale to satisfy the number of buyers.
Due to the health crisis, many homeowners were reluctant to list their homes earlier this year. That will change as the economy continues to recover. The choices buyers have will increase going into the new year. Don’t wait until additional sellers come to market before you decide to make a move.
3. The Process Is Going Quickly
Today’s ultra-competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and simpler, as buyers know exactly what they can afford before shopping for a home. According to the latest Origination Insights Report from Ellie Mae, the time needed to close a loan is just 49 days.
4. There May Never Be a More Important Time to Move
You’ve likely spent much of the last six months in your current home. Perhaps you now realize how small it is, and you need more space. If you’re working from home, your children are doing virtual school, or you just need more space, your current floor plan may not work for your family’s changing needs.
Homebuilders are beginning to build houses again, so you can choose the exact floor plan to match what your family needs, and you can make sure the outdoor space is what you want too.
The housing market is prime for sellers right now, so let’s connect to get the process started this fall. If the timing is right for you and your family, the market is calling your name.
The Bureau of Labor Statistics (BLS) released their latest Employment Situation Summary last Thursday, and it again beat analysts’ expectations in a big way. The consensus was for 3,074,000 jobs to be added in June. The report revealed that 4,800,000 jobs were added. The unemployment rate fell to 11.1% from 13.3% last month. Again, excellent news as the unemployment rate fell for the second consecutive month. However, there’s still a long way to go before the economy fully recovers as 17.8 million Americans remain unemployed.
Here are two interesting insights on the report:
What about a supposed misclassification?
The BLS addressed this at length in a blog post last week, and concluded by saying:
“Regardless of the assumptions we might make about misclassification, the trend in the unemployment rate over the period in question is the same; the rate increased in March & April and eased in May.”
They specifically noted the issue in the latest report by explaining that if they adjusted the rate for the potential miscalculation, it would increase from 11.1% to 12.1% (which is lower than the adjusted rate of 16.4% last month). They went on to say:
“However, this represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error.”
Does the shutdown of parts of the economy skew the unemployment numbers?
Because the uniqueness of 2020 impacts the employment situation in so many ways, each jobs report is now examined with a microscope to make sure the headlines generated by the report accurately convey what’s happening in the job market.
One such analysis is done by Jed Kolko, Chief Economist at Indeed. He believes the extraordinary number of people in the “temporary” unemployed category confuses the broader issue of how many people have permanently lost their job. He adjusts for this when calculating his “core unemployment rate” (which subtracts temporary layoffs and adds unemployed who didn’t search for a job recently).
The bad news is that his analysis reveals that the number of permanently unemployed is still rising (from 4.6% in April to 5.9% last month). The good news, however, is when you use his methodology to look back at the Great Recession, today’s “core unemployment rate” is significantly lower (5.9% versus 10.5% in April 2010).
Last week’s jobs report was much better than most expected. However, we should remain cautious in our optimism. As the Wall Street Journal explained in their analysis of the jobs report:
“U.S. job growth surged last month, underscoring the economy’s capacity for a quick rebound if businesses continue to reopen and consumers regain confidence. A recent coronavirus spike, however, could undermine trends captured in the latest jobs report.”
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.
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.
- For Sale By Owner (FSBO) is the process of selling real estate without the representation of a real estate broker or real estate agent.
- According to the National Association of Realtors’ Profile of Home Buyers & Sellers, 35% of homeowners who decided to FSBO last year did so to avoid paying a commission or fee. But, homes sold with an agent net 6% more than those sold as a FSBO according to Collateral Analytics.
- Before you decide to take on the challenge of selling your house on your own, let’s connect to discuss your options.
The travel industry is one of the major sectors that’s been hit extremely hard by the COVID-19 pandemic. Today, it’s hard to know how long it will take for summer travelers to be back in action and for the industry to fully recover. Homeowners who rent their secondary properties on their own or through programs like Airbnb, which has over 660,000 listings in the U.S. alone, have been impacted in this challenging time. Some of these homeowners are considering selling their vacation homes, and understandably so.
A recent CNN article indicated:
“With global travel screeching to a halt during the pandemic, a number of Airbnb hosts are planning to sell their properties…These desperate moves come as hosts face the possibility of losing thousands of dollars a month in canceled bookings while bills, maintenance costs, and mortgage payments pile up.”
If you’re one of the property owners in this position, you too may be feeling the pain of decreased travel, especially as we prepare for the typical busy summer vacation season. A recent survey notes that 48% of Americans have already canceled summer travel plans due to the current health crisis. In addition, 36% indicated they don’t have vacation plans, and only 16% said they did not cancel their summer travel.
The same survey also asked, “How long will you wait before traveling again?” Not surprisingly, only 29% of respondents are planning to travel within the next 6 months. That means 71% are putting their plans on hold for at least 6 months, or are still unsure about future travel. That can continue to add to the significant income loss that many property renters felt this spring.If you’re considering selling your rental property, know that there are two key factors indicating that selling your vacation home now may be your best move as a homeowner.
1. Inventory Shortage
The inventory of overall homes for sale is well below the demand from potential buyers, so many eyes may be searching for a home like yours. According to the National Association of Realtors (NAR), total housing inventory, meaning homes available to purchase, is down 19.7% from one year ago (see graph below):Inventory across the country continues to be a challenge, with only a 4.1-month supply of listings available at the current sales pace. For a balanced market, where there are enough homes available for interested buyers to purchase, that number would need to bump up to a 6-month supply. This means we don’t have enough inventory for the number of buyers looking for homes, so selling in this scenario is ideal. Buyers are looking now, and some vacation homes make a great primary residence or second home for those eager to escape from more populated urban areas.
2. Home Prices
The lack of inventory is also keeping homes from depreciating in value. Today, prices are holding strong and experts forecast home price appreciation to continue throughout this year. Selling your home while prices are holding steady is a sound business move. You’ll likely have equity you’ve earned working for you as well. If your home has been vacant for the past few months, the forced savings you have built in your equity may help balance out possible rental income loss due to the slowdown in the travel industry.
We don’t know exactly when heightened summer travel will return or what it will look like when it does. If you’re considering selling your vacation home, let’s connect today to determine your options in the current market.