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It is common knowledge that a large number of homes sell during the spring buying season. For that reason, many homeowners hold off putting their home on the market until then. The question is whether or not that will be a good strategy this year. The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring compared to the rest of the year? The National Association of Realtors (NAR) recently revealed which months and days of the year most people list their home. Here is a graphic showing the results: The circles represent the ten most popular listing dates in 2014. We can see that all ten days are in the second quarter of the year. The months in red represent which months most people put their home on the market. Again, the three months in the second quarter are most active for listings. Last year, the number of homes available for sale in January was 1,880,000.That number spiked to 2,350,000 by July!What does this mean to you?With the job situation improving and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring. They are out looking for a home right now. If you are looking to sell this year, waiting until the spring to list your home means you are putting your house on the market at a time you will have the greatest competition for your buyer. It may make sense to beat that rush of housing inventory to the market and list your home today.
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The residential real estate market may be returning to a more 'normal' balance in the DFW area, according to data recently published in Standard & Poor's Case-Shiller Home Price Index.
Even though home prices are at a record level in the Dallas/Ft. Worth are the recent local "home price surge" appears to be slowing down. Analysts expect a cooling off in the market because while home prices were up 8.6% in May over the same period last year, it has been the slowest rate of increase in over a year. "The higher year-over-year home price gains are behind us." said David Brown of Metrostudy, Inc. Brown also predicts that the overall increase in home prices will be under 10% for the year. Jed Kolko, chief economist with Trulia, Inc. has been quoted as saying, "Now that prices have risen significantly, there's less room for appreciation before homes start looking overvalued. Expanding inventory and less investor buying both will move the market closer to normal." A more balanced market, with moderately increasing values and steady sales will benefit both buyers and sellers who opt to enter the market during the remainder of 2014 and in 2015. New reports are revealing that the number ofexisting home owners purchasing a house is beginning to increase. Some are moving up, some are downsizing and others are making a lateral move. Another study shows that over 75% of these buyers will, in fact, be in that first category: a move-up buyer. We want to address this group of buyers in today’s blog post. There is no way for us to predict the future but we can look at what happened over the last year. Let’s look at buyers that considered moving up last year but decided to wait instead. Assume they had a home worth $300,000 and were looking at a home for $400,000 (putting 10% down they would get a mortgage of $360,000). By waiting, their house appreciated by 12% over the last year (national average based on the Case Shiller Pricing Index). Their home would now be worth $308,000. But, the $400,000 home would now be worth $448,000 (requiring a mortgage of $403,200). If your family sees yourself in this situation, it may make sense to move now than later. Prices are definitely appreciating and interest rates are beginning to rise. 1.) Prices Will Continue to Rise The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released last week projects appreciation in home values over the next five years to be between 12.3% (most pessimistic) and 32.8% (most optimistic). The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes any sense. 2.) Mortgage Interest Rates Are Increasing As reported by Freddie Mac, interest rates for 30-year fixed-rate mortgages have risen about one full percentage point over recent historic lows. The National Association of Realtors, the Mortgage Bankers Association, Freddie Mac and Fannie Mae, in their July forecasts, have all projected 30-year-fixed mortgage interest rates to be between 4.8 and 5.1% by this time next year. An increase in rates will impact YOUR monthly mortgage payment. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home. 3.) It’s Time to Move On with Your Life The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy. If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings. Texas home prices have regained all the value lost during the recession, according to a new report by CoreLogic Inc.
Texas joins Oklahoma, South Dakota and Nebraska as the only U.S. states where home prices are now rising above pre-recession levels, according to the just-released report. On average, home prices in the United States are 14.2 percent below where they were before the housing market decline. And five states – Arizona, Florida, Michigan, Nevada and Rhode Island – are still 30 percent below peak price levels. Home prices in North Texas have risen to a record high $185,820 median price, according to North Texas Multiple Listing Service data. With home values on the rise and interest rates at near record lows, now is an ideal time to buy or sell a home in the Dallas-Fort Worth area. Contact me to learn more about the real estate market in your neighborhood and to find out what your home is worth in today’s market. The most important need of anyone attempting to sell their house is – TO GET IT SOLD! It is imperative that you, the agent, are very direct in what it takes to get a house sold. Here is a checklist we put together. ACCESS - A seller should be willing to give almost unlimited access to potential purchasers if they are looking to sell. Any restrictions to showing the home will result in fewer buyers which could result in a lower price, a longer time on market or both. CONDITION - Condition goes a long way in determining whether or not a house sells. Bringing in a professional stager is the ultimate answer. If that is not possible, the seller should at least be willing to remove all the clutter and ‘throw on’ a fresh coat of paint where necessary. MORTGAGE OPTIONS - Very few owners are willing to give a first mortgage to a potential buyer. However, there are other mortgage options they perhaps should consider. Allowing FHA financing is an example. Perhaps, they would be willing to help the buyer out with a seller’s concession. The easier it is for a purchaser to finance the home, the greater the chance more buyers will be interested. PRICE - Every house must be sold twice: to the buyer and to the bank if a mortgage is involved. To get a home sold the price has to be right. There are studies that have shown that listing a house at a price greater than the market warrants results in that home taking a longer time to sell and also selling for less money. There is no doubt that the housing market is coming back nicely. What, if anything, could slow down the current momentum? We believe it may be sellers’ over exuberance when it comes to pricing. There is little doubt that house prices have appreciated over the last twelve months in most regions of the country. However, with both the inventory of homes for sale and interest rates increasing, we have to be careful to not over judge what the market can bare. Trulia just reported that asking prices have jumped dramatically and the increase is accelerating:
Buyers’ Purchasing PowerLet’s look at an example: A young couple is looking for a home and have predetermined that their budget will only allow them to spend $1,000 a month on a mortgage. At today’s mortgage rate of 4.5%, they could afford a $200,000 mortgage ($1,013 principal & interest). However, if rates jump to 5%, they would have to lower their mortgage amount to $190,000 in order to keep their monthly payment where they need it ($1,020). At 5.5%, the mortgage would need to be no more than $180,000 ($1,022). The Impact on PricesThis decrease in buyers’ purchasing power will have an impact on home values going forward. We do not believe it will cause a decrease in prices. However, we do believe it will likely cause current rates of appreciation to slow. If you are thinking about selling your home, don’t get carried away with current headlines about home price increases that have taken place over the last twelve months. Instead, call a local real estate professional. They will be best prepared to explain where prices are headed over the next six months. - source KCM Blog, July 15, 2013 Recent headlines indicate home values are rising rapidly, both locally and nationwide.
"Area home re-sales set record"... "median price is also highest ever as more high-end houses sell" Dallas Morning News, June 11, 2013 "Home prices up a record 7.4% - Area economy, few listings led to big increase" Dallas Morning News, June 26, 2013 "Home Prices See Record-Breaking Increase in April; New Home Sales Highest Since 2008; Consumer Confidence Surges to 5-Year High" according to Standard & Poor's Case/Shiller Home Price Indices. RIS Media Daily e-News, June 25, 2013 It's clear that average home values are rising, and rising rapidly in many markets. However, not all markets are 'average'. The increase in home values can vary widely from area to area and from neighborhood to neighborhood. An Ebby Halliday Companies' Associate who is familiar with your neighborhood can accurately assess the current market value of your home today. You may be surprised to learn how much the value of your home has increased. With 1,500 Associates in 30 DFW area offices, the Ebby Halliday Companies serve the entire Dallas/Fort Worth and North Texas real estate market. To find an Ebby Halliday Companies' Associate who specializes in your neighborhood, visit ebby.com ordaveperrymiller.com. Mary Frances |
AuthorPamela Edwards is an award winning, passionate Realtor and a native Dallasite. Her innovative marketing strategies lead to homes being sold 58% faster than the market average. Pamela goes above and beyond always focusing on having her clients best interest at hand. Archives
January 2015
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