Hurry Up!! Call your Agent and List your House!!

Hurry Up!! Call your Agent & List your House!! | Simplifying The Market

That headline might be a little aggressive. However, as the data on the 2015 housing market begins to roll in, we can definitely say one thing: If you are considering selling, IT IS TIME TO LIST YOUR HOME!

We realize that existing home sales stumbled in January compared to December. But, if we compare the current September-January time period to the same period a year ago, we can see that existing home sales have outpaced last year every month with the January sales numbers 200,000 homes greater than last January:

Existing Home Sales | Simplifying The Market

Pending home sales (houses going into a contract) as reported by the National Association of Realtors has also done much better in the last five months compared to a year earlier:

Pending Home Sales | Simplifying The Market

And, buyer demand is continuing to skyrocket:

Buyer Activity | Simplifying The Market

At the same time, the amount of housing inventory coming to the market compared to last year is plummeting:

Inventory Levels | Simplifying The Market

Bottom Line

With demand increasing and supply dropping, this may be the perfect time to get the best price for your home. Call in a local real estate professional today to see whether that is the case in your neighborhood.

Housing Market to “Spring Forward”

Housing Market to “Spring Forward” | Simplifying The Market

Just like our clocks this weekend in the majority of the country, the housing market will soon “spring forward”! Similar to tension in a spring, the lack of inventory available for sale in the market right now is what is holding back the market.

Many potential sellers believe that waiting until Spring is in their best interest, and traditionally they would have been right.

Buyer demand has seasonality to it, which usually falls off in the winter months, especially in areas of the country impacted by arctic temperatures and conditions.

That hasn’t happened this year.

Demand for housing has remained strong and is currently three times stronger than last year at this time.

The National Association of REALTORS (NAR) recently reported that the top 10 dates sellers listed their homes in 2014 all fell in April, May or June.

Those who act quickly and list now could benefit greatly from additional exposure to buyers prior to a flood of more competition coming to market in the next few months.

Bottom Line

If you are planning on selling your home in 2015, meet with a local real estate professional to evaluate the opportunities in your market.

New Construction = New Competition

New Construction = New Competition | Simplifying The Market

For the last several years, home sellers had to compete with huge inventories of distressed properties (foreclosures and short sales). The great news is that the supply of these properties is falling like a rock in the vast majority of housing markets (only 11% of homes sold in January). Many homeowners are now thinking of selling as the impact of this substantially discounted competition has disappeared.

However, every seller of an existing residential property must realize that there is a new form of competition in the market: newly constructed homes.

According to the National Association of Realtors’ Profile of Home Buyers & Sellers new home sales accounted for 16% of all homes sold in 2014. The graph below shows the top 5 reasons that a buyer would choose new construction over an existing home.

Reasons to Own a New Home | Simplifying The Market

The top three should not come by surprise. With a new home comes the ability to customize the design of the home and the ability to avoid having to renovate or deal with existing problems.

The 10% of respondents who cited “Lack of Inventory of Existing Homes” could very well increase in 2015. Existing home inventory for sale currently sits at a 4.7 months supply, well below the six-months needed to be at a historically normal market.

National Association of Home Builders (NAHB) reports that there is currently a 5.4 months supply inventory of new construction available for purchase.

Month's Inventory New Homes For Sale | Simplifying The Market

Bottom Line

With a steady buyer demand currently in the market, if you are thinking of selling, perhaps you should do it now to avoid additional competition coming to the market.

Selling Your Home? The Importance of Using an Agent

Selling Your Home? The Importance of Using an Agent | Simplifying The Market

When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. For the past two years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ most recent Profile of Home Buyers & Sellers.

However, the report also revealed that for the second year in a row 96% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.

Buyers search for a home online but then depend on an agent to find the actual home they will buy (53%) or negotiate the terms of the sale & price (31%) or understand the process (63%).

Stephen Phillips, the Chief Operating Officer for HSF Affiliates LLC, put it best:

“Home buyers are more informed than ever with their Internet searches and ongoing research; however, there’s a critical need to transform that information into analysis and advice that helps consumers make the best home-buying and selling decisions.

The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Home Sales are NOT Collapsing!

Home Sales are NOT Collapsing! | Simplifying The Market

The National Association of REALTORS (NAR) just released their Existing Home Sales report and some have taken the results and ran with headlines like:

“Existing home sales collapse in January despite low mortgage rates”.

Let’s take a closer look at what the report really shows. There is a seasonality to home sales that happens every year, with a decline in January, (as shown in the graph below.) But in reality 200,000 more homes (3.2%) sold this January over last January.

Existing Home Sales Year-over-Year | Simplifying The Market

The demand for housing hasn’t been a challenge.

Current buyer demand, as shown in the graph below, is actually 3x greater than that of January 2014.

Buyer Activity | Simplifying The Market

NAR’s Chief Economist, Lawrence Yun points to the real issue at hand:

“Realtors® are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions.”

Months Inventory of Homes For Sale | Simplifying The Market

Even though buyers are out looking for their dream home, they cannot find it! Inventory levels increased slightly since December, but are still below historic norms and unable to keep up with the elevated demand.

Bottom Line

If your plan for 2015 includes selling your house, waiting till the Spring may not be in your best interest. Meet with a local real estate professional in your market who can explain the opportunities available now.

Two Graphs that Scream – List Your Home Today!

Two Graphs that Scream - List Your Home Today! | Simplifying The Market

We all learned in school that when selling anything, you will get the most money if the demand for that item is high and the inventory of that item is low. It is the well-known Theory of Supply & Demand.

If you are thinking of selling your home, here are two graphs that strongly suggest that the time is now. Here is why…

DEMAND

According to research at the National Association of Realtors (NAR), buyer activity last month (January) was three times greater than it was last January. Purchasers who are ready, willing and able to buy are in the market at great numbers.

Buyer Demand | Simplifying The Market

SUPPLY

The most recent Existing Home Sales Report from NAR revealed that the months’ supply of housing inventory had fallen to 4.4 months which is the lowest it has been in over a year.

Months Supply of Home For Sale | Simplifying The Market

Bottom Line

Listing your house for sale when demand is high and supply is low will guarantee the offers made will truly reflect the true value of your property.

Consumer Confidence at Highest Level in Over a Decade

Consumer Confidence at Highest Level in Over a Decade | Simplifying The Market

Two recently released reports reveal that the American public is starting to feel much better about the U.S. economy. The University of Michigan’s Surveys of Consumers showed that:

“Consumer optimism reached the highest level in the past decade in the January 2015 survey…Consumers judged prospects for the national economy as the best in a decade, with half of all consumers expecting the economic expansion will continue for another five years. The anticipated strength in the overall economy has been accompanied by more favorable income and employment expectations.”

Here is a chart showing results over the last decade:

Consumer Optimism | Simplifying The Market

As all consumers are feeling more optimistic, more young adults are moving out of their parents’ basements and into a residence of their own. The recent Census report shows that new household formations skyrocketed in 2014. Below is a chart showing the historical significance of the numbers:

Household Formations | Simplifying The Market

Bottom Line

The economy is definitely improving and, more importantly, the American consumer is beginning to feel much more confident. This should lead to a very robust real estate market in 2015.

Real Estate Heading in the “Right Direction”

Real Estate Heading in the “Right Direction” | Simplifying The Market

The housing market has taken a great turn toward recovery over the last few years. The opinions of the American public toward real estate took longer to recover, until recently.

For the first time since 2006, Americans have an overall positive view of real estate, giving the industry a 12% positive ranking in a Gallup poll.

Americans were asked to rate 24 different business sectors and industries on a five-point scale ranging from “very positive” to “very negative.” The poll was first conducted in 2001, and has been used as an indicator of “Americans’ overall attitudes toward each industry”.

America's View on Real Estate | Simplifying The Market

Americans’ view of the real estate industry worsened from 2003 to the -40% plummet of 2008.  Gallup offers some insight into the reason for decline:

Prices Dropped

“In late 2006, real estate prices in the U.S. began falling rapidly, and continued to drop. Many homeowners saw their home values plummet, likely contributing to real estate’s image taking a hard hit.”

Housing Bubble

“The large drops in the positive images of banking and real estate in 2008 and 2009 reflect both industries’ close ties to the recession, which was precipitated in large part because of the mortgage-related housing bubble.”

Bottom Line

“Although the image of real estate remains below the average of 24 industries Gallup has tracked, the sharp recovery from previous extreme low points suggests it is heading in the right direction.”

If the news of recovery has you considering homeownership, meet with a local real estate professional to discuss the opportunities that exist in today’s market.