The U.S. housing market can no longer be painted with one brush, as the housing recovery is playing out very differently across the country. Here are some anecdotes gleaned from a consulting team…
Category Archives: Sellers
Home Prices Climb in Seattle and Beyond
Home prices in 20 major U.S. cities increased 12.2 percent in May compared to a year ago, according to the Standard & Poor’s/Case-Shiller home price index released on Tuesday.
And according to the Northwest Multiple Listing Service, prices locally continue to rise. The median price for last month’s closed sales area-wide was $279,950, which is about 9.8 percent higher than the year-ago.
The red hot housing market is prompting some realtors to get creative to satisfy eager home buyers that are tired of losing bids on their home of their choice.
New figures from the MLS also show pending sales during June jumped 10.6 percent from twelve months ago as buyers scrambled to lock in loan rates and bid on a limited supply of homes.
Building the Foundation for Successful Housing Reform
According to David Stevens, President and CEO of the Mortgage Bankers Association:
“The U.S. housing market is showing definite signs of recovery with purchase originations beginning to increase and more liquidity in the market. The recent “good times” can be attributed to two factors – the federal government’s Quantitative Easing (QE) program which created extremely low interest rates, and refinancing ease of negative equity loans due to HARP.
Now that these programs have almost run their course and given a much-needed boost to the marketplace, as anticipated, the federal government is beginning to plan for reducing the QE program and the refinance boom is coming to an end, causing overall market contraction. When the market contracts we can see the true operational impacts of regulations.”
More Homes Coming To Market
Bidding wars aren’t over, but the number of homes listed for sale is increasing, by quite a bit in some of the tightest markets.
According to the latest National Housing Trend Report by Realtor.com, the number of homes listed for sale grew 4.26% from May to June, with a total of 1.93 million listed for sale nationwide.
The number of homes for sale grew significantly more in some areas where the inventory shortage had become the most acute, particularly in California.
Higher Mortgage Rates Don’t Mean Higher Home Prices
Mortgage rates have climbed by more than a percentage point since late April.
If history is any indication, the recent spike in mortgage rates is going to have little to no impact on home prices, according to a new report from Fannie Mae.
After looking at mortgage rates going back to 1990, Fannie Mae’s researchers came to the surprising conclusion that while rising rates were likely to hurt the number of home sales, they had virtually no impact on home prices.
Inventory Shortages Ease
Inventory shortages that constrained home sales this spring are beginning to ease, with the number of homes listed for sale trending upwards in June, according to realtor.com data, The Wall Street Journal reports.
The total number of listings rose by 4.3 percent from May to June, to 1.9 million homes. While that’s down by 7.3 percent from the same time a year ago, inventory was off 18.6 percent year over year in February, the newspaper said.
Real estate industry observers have speculated that home price gains might spur more homeowners to put their properties up for sale — and for builders to break ground on more new homes.
With the latest CoreLogic Home Price index showing a 12.2 percent year-over-year gain in home prices in May, the recent uptick in listings — though bolstered by a normal seasonal increase — suggests that these market reactions may be starting to play out.
Market stays “extremely competitive;” Some believe “housing affordability may never be better”
Earlier this month, the NWMLS reported: Current market conditions — including rising mortgage rates, tight inventory and declining unemployment — are driving even more buyers into what is already an “extremely competitive housing market,” reported OB Jacobi, a member of the board of directors for Northwest Multiple Listing Service.
New figures from the MLS show pending sales during June jumped 10.6 percent from twelve months ago as buyers scrambled to lock in loan rates and bid on a limited supply of homes. Members in the 21 counties served by Northwest MLS reported 9,484 mutually accepted offers last month, outgaining the year-ago number of pending sales by 907 transactions.
“In June, our brokers reported anywhere from 2-to-7 offers on homes in the lower to mid-price ranges,” said Jacobi, president of Windermere Real Estate Company in Seattle. He noted interest rates for 2013 reached a new high in mid-June — “a result of improved confidence in the U.S. economy. And now, with Seattle’s jobless rate below 5 percent we expect even further pressure on housing as new workers move to the area,” he added.
“Multiple offers situations are almost old news,” remarked Frank Wilson, an officer on the Northwest MLS board. He recommends sellers prepare to deal with multiple offers by discussing a strategy with their broker when they list their home. Buyers should consider writing offers that may be above list price and contain an escalation clause, Wilson suggests.
While would-be purchasers jostled for acceptance of their offers during June, 7,318 newly-minted homeowners took possession of their home. That volume of closed sales compares to 6,214 completed transactions for the same month a year ago for a 17.8 percent increase.
Mistakes Sellers Make When Hiring a Listing Agent
There are loads of lists to be found online and in books about the questions you should ask when you interview listing agents. But it’s a lot harder to figure out what mistakes the sellers who have gone before you would avoid, if they could.
Trulia has heard from thousands of sellers over the years, online and off, about the things they neglected to do when they were selecting their listing agent – the omissions they regretted later.
3 Skills Every Modern Home Seller Needs
Although it’s easier to sell a home now than it has been in years, it’s still a complex process with loads of decisions to make and relationships to manage. Plus, the timing and outcome of your home’s sale has a huge effect on your daily life, now and in the future, so you’ve got to get it right. Learn why the 3 D’s — delegation, detachment, and diligence — are critical skills that every home seller on today’s market should master!
Price Per Square Foot Rising in Most Markets
As the economy continues to grow jobs, consumer confidence rises and residential rental rates increase, the demand for housing rises. Given a very tight inventory of builder-ready lots, new home construction is trailing demand. As a result, asking prices for both new and existing homes, and ultimately sales prices, are climbing. In some cities prices are literally rocketing.
Dr. Ted Jones is Stewart Title’s Vice President/Chief Economist and Director of Investor Relations. You may read this article on his blog…
Managing The Real Estate Details 