Pent-Up Buyer & Seller Demand about to be Released?

Pent-Up Buyer & Seller Demand about to be Released? | The KCM Crew

American consumers’ perception of the residential real estate market was revealed in a recent survey by Edelman Berland. They interviewed 2,500 Americans who are “in the market” to buy or sell a home. Respondents were between 25-64 years old with a household income of at least $50,000.

Here are the key findings of the survey:

BELIEF in the HOUSING MARKET

There is a strong belief among this segment of the population that the housing market is on the right track and that is committing almost 7 out of 10 to buy or sell a home this year. Millennials belief in real estate is actually higher than the overall population.

  • 77% of consumers (and 85% of Millennials) have a favorable view of housing
  • 79% of people (and 83% of Millennials) believe the housing market is on the right track
  • 69% of consumers said they are committed to buying or selling a home now

CHALLENGES

The extreme weather faced by much of the U.S. definitely delayed many real estate transactions. That pent-up demand is now being released causing price appreciation in many regions of the country. This rise in prices and the expected increase in interest rates is causing many purchasers to buy sooner than later.

  • The main reason (45%) people waited to make a real estate transaction is they were waiting for spring weather to arrive
  • 76% of consumers believe that pent-up demand will create even more competition for existing homes
  • 74% of consumers are most concerned about higher than expected prices when buying a home this spring
  • 83% of consumers are motivated to act sooner than later because they fear interest rates will increase

Other interesting findings from the survey (broken down by buyers and sellers):

Buyers

  • 80% of real estate consumers are more committed to buying
  • 78% of potential buyers said it will be easier to purchase a home this spring since “homeowners want to sell”
  • 72% are encouraged because “the economy is improving”
  • 46% of buyers said spring was a more favorable time to buy a home
  • 28% of buyers said summer was a more favorable time to buy a home (an 8% increase over last summer)

Sellers

  • 83% of real estate consumers are more committed to selling
  • 63% of sellers are buoyed this spring by the improving economy and their perception that buyers are motivated following the difficult winter

Bottom Line

The real estate market will continue to gain ground through the summer as more and more people realize this is a great time to move. And, the vast majority (88%) of those surveyed realized that hiring a real estate professional is important to their home buying or selling success.

5 Reasons to Sell Now

5 Reasons to Sell Now | The KCM Crew

Many sellers are still hesitant about putting their house up for sale. Where are prices headed? Where are interest rates headed? Can buyers qualify for a mortgage?  These are all valid questions. However, there are several reasons to sell your home sooner rather than later. Here are five of those reasons.

1. Demand is Strong

There is currently a pent-up demand of purchasers as many home buyers pushed off their search this past winter because of extreme weather. According to the National Association of Realtors (NAR), the number of buyers in the market, which feel off dramatically in December, January and February, has begun to increase again over the last few months. These buyers are ready, willing and able to buy…and are in the market right now!

2. There Is Less Competition Now

Housing supply is still under the historical number of 6 months’ supply. This means that, in many markets, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.

There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as prices increased over the last eighteen months. Many of these homes will be coming to the market in the near future. Also, new construction of single-family homes is again beginning to increase. A recent study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference).

The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.

3. The Process Will Be Quicker

One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. As the market heats up, banks will be inundated with loan inquiries causing closing timelines to lengthen.  Selling now will make the process quicker and simpler.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate in the low 4’s right now. Rates are projected to be over 5% by this time next year.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market and pricing it so it sells. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

Future House Prices: A Look into the Crystal Ball

Home-Price-Expectation-275Today, many real estate conversations center on housing prices and where they may be headed. That is why  the Home Price Expectation Survey is a great barometer. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

  • Home values will appreciate by 4.4% in 2014.
  • The cumulative appreciation will be 19.5% by 2018.
  • That means the average annual appreciation will be 3.6% over the next 5 years.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 9.4% by 2018.

Individual opinions make headlines. This survey is a fairer depiction of future values.

FSBO Millionaires Use Real Estate Agents

We pride ourselves on the quality of real estate information we deliver each and every day. We try to gather empirical evidence to validate the positions we take. We do not use just an anecdotal story to make a point. We also do not get caught up in the sensationalism of the moment. However, today will be different.

Confusion2Do as I Say… not as I Do

This adage could be no truer today after it has been reported, in a recent Herald Tribune article, that when it came to selling his Florida mansion, Al Bennati, the longtime chief executive of BuyOwner.com, has chosen to list his home with a local real estate agent.

BuyOwner.com is one of many websites out there now that encourage home owners that they do not need to enlist the help of a professional agent to be able to sell their home. They go as far as to tell homeowners:

“BuyOwner.com allows you to reach the most potential buyers in the shortest amount of time, in the most effective (the Internet) and most cost effective manner (no commission!) possible.”

Let’s break down that statement:

Myth #1 – The internet is the most effective way to sell your home

Many have said that, with the introduction of home search on the internet, hiring an agent is no longer a necessity. When the time came to list his own home, Bennati went against his own advice saying:

“To sell a home of this magnitude, it needs to be done by a person and a company that reaches buyers of this caliber.”

Myth #2 – FSBO’ing is the most cost effective solution

Without proper exposure to the “right kind of buyers” your home will not sell. Many real estate professionals have elaborate strategies to get your listing in front of exactly who needs to see it.

The most recent Home Sellers’ and Buyers’ Profile Report from the National Association of Realtors revealed that, though 92% of buyers search for a home on the internet, 90% still use a real estate professional.

This isn’t the first time that a CEO of a major FSBO website has enlisted the help of an agent when the time came to sell their own home. In August of 2011 it was reported that Colby Sambrotto of forsalebyowner.com who, after failing to sell his home using FSBO websites, needed an agent to sell his NYC apartment.

And, he got more money!!!!

Bottom Line

Two separate people made fortunes convincing others to sell their home through their FSBO sites. Yet, when it came to selling their own home, they recognized the value of using a real estate professional.

There is a reason the real estate industry has been around for centuries: it performs a valuable service.

5 Reasons to Hire a Real Estate Professional

5 GoldWhether you are buying or selling a home, you need an experienced Real Estate Professional to lead you toward your ultimate goal. In this world of instant gratification and Internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but rather have been strengthened in recent months due to rising interest rates & home prices as the market recovers.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

Not only is it important for your home to be priced correctly from the start, to attract the right buyers and shorten the time that it’s on the market, but you also need someone who is not emotionally connected to your home, to give you the truth as to your home’s value.

According to the National Association of REALTORS, “the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the Internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to, to tell you how to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

“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.” – Dave Ramsey

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn’t hike up Kilimanjaro without a Sherpa, or replace the engine in your car without a trusted mechanic, why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

A Great Reason to Sell Now

5.8 BlogThe price of any item (including residential real estate) is determined by ‘supply and demand’. If many people are looking to buy an item and the supply of that item is limited, the price of that item increases.

According to the National Association of Realtors (NAR), the supply of homes for sale is still below the normal 6 month level of inventory. That means less competition.

However, a recent study revealed that 71% of current homeowners are considering selling their home this year. Putting your home on the market now instead of waiting for this increased competition to come to the market might make a lot of sense.

Buyers currently in the market are motivated purchasers. They want to buy now. With limited inventory available in most markets, a seller will be in a great position to negotiate their best possible price.

Difference Between a ‘White Lie’ and Lying

1.22 VisualGrowing up it seemed ‘white lies’ were okay while lying was a sin. As children, we sometimes had difficulty understanding where the line was. As we matured, we realized there most definitely was a difference.

If a husband or wife asks if it is okay to invite their parents over for dinner, the spouse would probably say ‘sure’ even if it wasn’t 100% the truth. That was a ‘white lie’. If a young boy dresses up as a monster on Halloween and asks his father if he looks ‘really scary’, it was okay for his dad to say ‘YES’! That was a ‘white lie’.

In both cases, the person telling the ‘white lie’ was saying what the other person wanted to hear. In both cases, there was no harm in not telling the 100% truth. In both cases, it was a ‘white lie’. However, if we are not telling the 100% truth in order to save someone’s feelings AND IT HURTS THEM, we are lying.

What does this have to do with real estate?

We believe there are some in the real estate industry more worried about a homeowner’s feelings than they are about telling the truth about the current value of their home. These agents are not necessarily malicious. They just realize they may disappoint a seller at a listing appointment by telling the truth about what the house will sell for. They find it difficult to deliver tough news. To make sellers feel better, they lie.

Good agents can deliver good news. Great agents know how to deliver tough news.

In today’s real estate market, you need an agent that will tell you the truth, even when you don’t want to hear it. You need an agent more worried about your family than they are about your feelings. You need an agent who can get the house sold!

What this means to you

If you are interviewing potential listing agents, demand they tell you the truth. Don’t hire the agent that tells you what you want to hear. Hire the agent that tells you what you need to know. Reward their honesty.