Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). In a housing market where supply is very low and demand is very high, home values increase rapidly. One major challenge in such a market is that bank appraisal. If prices are jumping, it is difficult for appraisers to find adequate comparable sales (similar houses in the neighborhood that closed recently) to defend the price when doing the appraisal for the bank.
Spring is in full force; the summer months are right around the corner. If you are debating moving up to your dream home, here are four great reasons to consider buying today instead of waiting.
We are pleased to have Nikki Buckelew back as our guest blogger for today’s post. Nikki has extensive experience working with seniors and is the Founder & CEO of the Senior Real Estate Institute. Enjoy!
If you have not bought or sold a home in a few years (or maybe decades) it is likely that there are more than a few new trends in real estate that you will encounter as you begin to interview real estate agents.
Yesterday, the National Association of Realtors (NAR) released their Existing Home Sales Report. The numbers shocked many analysts as they revealed a 10.4% increase over the same month last year.
This is the highest number of sales since September 2013. Sales have increased year-over-year for six consecutive months and the 10.4% increase is the highest annual increase since August 2013. March’s sales increase was the largest monthly increase since December 2010.
Lawrence Yun, NAR’s chief economist, explained:
“After a quiet start to the year, sales activity picked up greatly throughout the country in March. The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years.”
Here is a graph showing home sales so far this year:
An increase in sales occurred in every region of the country even the Northeast that experienced one of their roughest winters in years:
Houses are flying off the shelves. This may be the perfect time to sell yours.
Though the real estate market has improved, we still have one item holding it back from a full recovery – a robust supply of homes for sale. Demand has increased dramatically. At the same time, housing inventory is decreasing especially at the lower price points.
The National Association of Realtors (NAR) recently revealed that there is a pent-up seller demand caused by the uncertainty created by the housing crisis of the last decade.
What does that mean to you?
Houses listed today sell quickly. With prices still below peak values of 2007 in many parts of the country and mortgage interest rates at historic lows, this may be the perfect time for your family to make the move to the dream house you always wanted – whether that’s a larger home or that vacation/retirement home you have been looking at.
What does that mean to the economy?
Housing has always been an essential part of the U.S. economy. As we have reported before, real estate not only provides housing for families. It is often the greatest source of wealth and savings for many. The recent increase in real estate sales has led to an increase in real estate prices. This has increased the value of everyone’s’ home, whether they are selling or not. This leads to an increase in consumer confidence which in turn leads to an increase in consumer spending. Plus, each home sale automatically puts money into the economy.
NAR compiled data from research conducted by the Bureau of Economic Analysis & Macroeconomic Advisors on the economic impact of a home purchase.
After reviewing the data, they concluded that the total economic impact of a typical home sale in the United States is an astonishing $52,205.
The more homes that sell, the better the economy.
In order for the U.S. economy to get better, we need to sell more homes. Perhaps, it makes sense for one of those homes to be yours.
If you have considered selling but are still a little nervous, now might be the time to sit down with a real estate professional familiar with your market and see what your options truly are.
The April 2015 U.S. Economic & Housing Market Outlook from Freddie Mac revealed that they are optimistic about the real estate market in 2015. As a matter of fact, the sub-title of the report was “Great Expectations”.
What made Freddie Mac so optimistic? Here are a few highlights from the report:
“For the remainder of the year we should see a resumption of solid economic growth and acceleration in housing activity. Notwithstanding a disappointing March jobs report the acceleration is already underway.”
“With spring upon us, housing markets are poised to accelerate and we expect the best year for home sales since 2007. Despite harsh winter weather to start the year, home sales through February are only off from the 2013 pace by 7,000 sales… Pending home sales were up 3.1 percent in February to the highest level since June 2013. This marked the fourth consecutive month for rising pending home sales showing positive momentum in general for the housing market.”
“By the end of the spring home buying season in June, we should be well above the pace of home sales for any year since 2007.”
“We are as optimistic about trends in housing markets moving forward as we have ever been since the depths of the Great Recession.”
“Due to strong growth, we are expecting house prices to increase 4.0 percent in 2015.”
But there were some warnings…
On available supply:
“With low mortgage rates, improving labor markets, and rising demand, one key issue for housing over the next two years will be the lack of supply of for-sale and for-rent homes.”
“Many metro areas that have seen robust job growth and population increases are facing shortages of available for-sale inventory.”
On interest rates:
“However, by the end of the year long-term interest rates should only increase modestly, ending the year at about 4.3 percent for the 30-year fixed rate mortgage.”
Note: Freddie Mac worded this as being not that crucial. However, a 4.3% mortgage rate is about a .75 increase over current rates.
Things are looking good for the real estate market. If you are thinking of selling, contact me to discuss how this applies to your neighborhood.