If you are considering selling your current home, to either move up to a larger home or into a home in an area that better suits your current family needs, great news was just revealed.
Last week, Trulia posted a blog, Not Your Father’s Housing Market, which examined home affordability over the last 40+ years (1975-2016). Their research revealed that:
“Nationally, homes are just about the most affordable they’ve been in the last 40 years… the median household could afford a home 1.5 times more expensive than the median home price. In 1980, the median household could only afford about 3/4 of the median home price.
Despite relatively stagnant incomes, affordability has grown due to the sharp drop in mortgage rates over the last 30 years – from a high of over 16% in the 1980s to under 4% by 2016.
Of the nation’s 100 largest metros, only Miami became unaffordable between 1990 and 2016. Meanwhile, 22 metros have flipped from being unaffordable to becoming affordable in that same time frame.”
Here is a graph showing the Affordability Index compared to the 40-year average:
The graph shows that housing affordability is better now than at any other time in the last forty years, except during the housing crash last decade.
(Remember that during the crash you could purchase distressed properties – foreclosures and short sales – at 20-50% discounts.)
There is no doubt that with home prices and mortgage rates on the rise, the affordability index will continue to fall. That is why if you are thinking of moving up, you probably shouldn’t wait.
Bottom Line
If you have held off on moving up to your family’s dream home because you were hoping to time the market, that time has come.
CoreLogic’s latest Equity Report revealed that 675,000 US homeowners regained positive equity in their homes in 2017. This is great news for the country, as 95.1% of all mortgaged properties are now in a positive equity situation.
“U.S homeowners with mortgages (roughly 63% of all the properties) have seen their equity increase by a total of $908.4 billion since the fourth quarter 2016, an increase of 12.2%, year over year.”
Price Appreciation = Good News for Homeowners
Frank Nothaft, CoreLogic’s Chief Economist, explains:
“Home-price growth has been the primary driver of home-equity wealth creation. The CoreLogic Home Price Index grew 6.2 percent during 2017. The largest calendar-year increase since 2013. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years.”
He also believes this is a great sign for the market in 2018, saying:
“Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years.”
This is great news for homeowners! But, do they realize that their equity position has changed?
A study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their homes as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 4.9% of homes are in that position (down from 6.3% in Q4 2016).
The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%) when in actuality, 83% do!
This means that 46% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a house (either larger or smaller) that better meets their current needs.
Fannie Mae spoke out on this issue in their report:
“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”
Bottom Line
If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2018! Let’s get together to evaluate your situation!
The number of building permits issued for single-family homes is the best indicator of how many newly built homes will rise over the next few months. According to the latest U.S. Census Bureau and U.S. Department of Housing & Urban Development Residential Sales Report, the number of these permits were up 7.4% over last year.
How will this impact buyers?
More inventory means more options. Lawrence Yun, NAR’s Chief Economist, explained this is good news for the housing market – especially for those looking to buy:
“This rise in single-family housing construction will help tame home price growth, and the increase in multifamily units should continue to help slow rent growth.”
How will this impact sellers?
More inventory means more competition. Today, because of the tremendous lack of inventory, a seller can expect:
A great price on their home as buyers outbid each other for it
A quick sale as buyers have so little to choose from
Fewer hassles as buyers don’t want to “rock the boat” on the deal
With an increase in competition, the seller may not enjoy these same benefits. As ChiefEconomistNela Richardson, added:
“Because existing home inventory has been so low for so long, new construction is taking a larger share of the market…Builders meet the buyers and see the demand firsthand.”
Bottom Line
If you are considering selling your house, you’ll want to beat this new competition to market to ensure you get the most attention for your listing and the best price. Start by finding out what your home is worth with a free, no obligation Home Evaluation.
Some believe that the combined effects of the new tax code and rising mortgage rates will have an adverse impact on residential real estate prices in 2018. However, the clear majority of recently surveyed housing experts believe that home values will continue to rise this year.
What is the Home Price Expectation Survey?
Each quarter, Pulsenomics surveys a nationwide panel of economists, real estate experts and investment & market strategists. Those surveyed include experts such as:
Daniel Bachman, Senior Manager, U.S. Economics at Deloitte Services, LP
Kathy Bostjancic, Head of U.S. Macro Investors Service at Oxford Economics
David Downs, Real Estate Finance Professor at VCU
Edward Pinto, Resident Fellow at American Enterprise Institute
Albert Saiz, Director at MIT Center for Real Estate
Where do these experts see home values headed in 2018?
Here is a breakdown of where they see home values twelve months from now:
21.6% believe prices will appreciate by 6% or more
71.6% believe prices will appreciate between 3 and 5.99%
5.7% believe prices will appreciate between 0 and 2.99%
Only 1.1% believe prices will depreciate
Bottom Line
Almost ninety-nine percent of the top experts studying residential real estate believe that prices will appreciate this year, and over 93% believe home values will appreciate by at least 3%.
How do you select the members of your team who are going to help make your dream of owning a home a reality? What should you be looking for? How do you know if you’ve found the right agent or lender?
The most important characteristic that you should be looking for in your agent is someone who is going to take the time to really educate you on the choices available to you and your ability to buy in today’s market.
As the financial guru Dave Ramsey advises:
“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.”
Do your research. Ask your friends and family for recommendations of professionals they’ve worked with in the past and have had good experiences with.
Look for members of your team who will be honest and trustworthy; after all, you will be trusting them to help you make one of the biggest financial decisions of your life.
Whether this is your first or fifth time buying a home, you want to make sure that you have an agent who is going to have the tough conversations with you, not just the easy ones. If your offer isn’t accepted by the seller, or they think that there may be something wrong with the home that you’ve fallen in love with, you would rather know what they think than make a costly mistake.
“Buyers from all generations primarily wanted their agent’s help to find the right home to purchase. Buyers were also looking for help to negotiate the terms of sale and to help with price negotiations.” Additionally, “Help understanding the purchase process was most beneficial to buyers 37 years and younger at 75 percent.”
Look for someone to invest in your family’s future with you. You want an agent who isn’t focused on the transaction but is instead focused on helping you understand the process while helping you find your dream home.
Bottom Line
In this world of Google searches, where it seems like all the answers are just a mouse-click away, you need an agent who is going to educate you and share the information that you need to know before you even know you need it.
Green Team New Jersey Realty recently attended the 2018 Circle of Excellence Extravaganza and Expo. An annual celebration of Sussex County’s exceptional and excellent REALTORS who have achieved the prestigious Circle of Excellence and Distinguished Sales Club Awards. We had the pleasure of joining several of our agents as they accepted their awards.
Take a behind the scenes look at all the excitement as these top agents went on stage to receive their awards.
February’s numbers are in, we’re nearing the end of March, and the Scoreboards show the possible contenders for the first quarter sales leader awards. Based on actual numbers for January and February, the Warwick Scoreboard has Vikki Garby in the lead, followed by Nancy Sardo and Lucyann Tinnirello. In Vernon, Joyce Rogers leads Charles Nagy and Ted Van Laar. In Warwick, total sales volume is down slightly from January/February of 2017, while Vernon’s total sales volume is up by over $700,000 from the same period in 2017. However, if projections are correct, March will see sales volume increase in both Orange and Sussex Counties. March may also see shifts in the Scoreboard tallies.
This month’s business review meeting marked a Green Team first. The market stats were reviewed on Facebook Live (facebook.com/greenteamhq), giving agents and clients alike the opportunity to participate in real time. Geoff Green moderated the review, with panelists Angela Murphy and Terry Gavan commenting on the Orange County market and Pamela Zachowski providing commentary on the Sussex County market. Melissa Bressette, Green Team’s Marketing Director, also participated, with questions regarding the impact of rising interest rates on home sales.
Orange County, NY Real Estate Market Report – February 2018 Results
We are pleased to share with you a Housing Market Report from February 2018. We break down the local real estate activities and provide you with stats, graphs, and analysis of our local and regional real estate market. You can sign up on our website (www.greenteamhq.com) for monthly market updates. This month the market review was held on Facebook Live. You can visit our Facebook page to view the video, as well as informative posts. (www.facebook.com/greenteamhq/videos)
Average Days on the Market
The faster homes are selling, the hotter the market. Look for the lowest number on the graph as opposed to the highest. The calculation in New York State is from the List Date to the Contract Date.
The average number of days on the market for homes in Orange County continues to decline, which is good news for the market. In February, the average number of days on the market was 104.
Average Price
Prices started coming back in July of 2017. There are Sellers with big mortgages on their homes who are patiently waiting, putting off retirement plans, etc., waiting for prices to come up more. When they do, inventory will open up. February of this year had the highest average price for a February since 2015.
Average Sold to Asked Ratio
The percentage a house sold for under or over the last asking price (not the original price)
The average sold to asked ratio is on the rise. At 96.86%, this is the highest number for a February since 2014.
Homes that sold at 100% or more of last asking price
The stats came in just slightly lower than February of last year, but higher than February 2014-2016. 2017’s numbers were consistently the highest since 2014, and 2018 is continuing that trend, indicating a strong market.
Units Sold
There were continual increases in January. While there was a slight log jam in February, the red line should consistently rise above the blue line for the rest of the year. It’s a healthy market place. According to Angela Murphy of the Green Team’s Warwick office, this is a strong, healthy market. There is a shortage of inventory, but no shortage of buyers. Additionally, most buyers don’t want to do work on a home. They are looking for turn-key properties. This is a good market for investors interested in flipping.
Note
Melissa Bressette, Marketing Director for the Green Team, asked what impact rising interest rates were having. According to Angela, despite rising interest rates, good connections with mortgage lenders can ease buyers’ minds and work with them on financing homes. Rates are still pretty low and affordable. If homes are priced correctly, there is usually a $10-$15,000 spectrum from asking price to where it’s sold. Comps of sold properties are more important than comps of properties that are for sale.
February’s numbers are in, we’re nearing the end of March, and the Scoreboards show the possible contenders for the first quarter sales leader awards. Based on actual numbers for January and February, the Warwick Scoreboard has Vikki Garby in the lead, followed by Nancy Sardo and Lucyann Tinnirello. In Vernon, Joyce Rogers leads Charles Nagy and Ted Van Laar. In Warwick, total sales volume is down slightly from January/February of 2017, while Vernon’s total sales volume is up by over $700,000 from the same period in 2017. However, if projections are correct, March will see sales volume increase in both Orange and Sussex Counties. March may also see shifts in the Scoreboard tallies.
This month’s business review meeting marked a Green Team first. The market stats were reviewed on Facebook Live (facebook.com/greenteamhq), giving agents and clients alike the opportunity to participate in real time. Geoff Green moderated the review, with panelists Angela Murphy and Terry Gavan commenting on the Orange County market and Pamela Zachowski providing commentary on the Sussex County market. Melissa Bressette, Green Team’s Marketing Director, also participated, with questions regarding the impact of rising interest rates on home sales.
Sussex County, NJ Real Estate Market Report – February 2018 Results
We are pleased to share with you a Housing Market Report from February 2018. We break down the local real estate activities and provide you with stats, graphs, and analysis of our local and regional real estate market. You can sign up on our website (www.greenteamhq.com) for monthly market updates. This month the market review was held on Facebook Live. You can visit our Facebook page to view the video, as well as informative posts. (www.facebook.com/greenteamhq/videos)
Average Days on the Market
The faster homes are selling, the hotter the market. Look for the lowest number on the graph as opposed to the highest.
At 90.89 average days on market, this is the lowest number for February since 2014. According to Pamela Zachowski, Green Team New Jersey Realty agent, if buyers don’t act quickly, they’re losing houses.
Average Price
The average price is still below every other year, despite the positive signs in the other categories. There is a tremendous amount of pre-foreclosure and foreclosure inventory and a lot of low priced homes. Banks are starting to unleash some of these homes that they had held on to, not wanting to take too big a loss. Pam finds there are a lot of foreclosures on the market, caught in a long process of investors buying and flipping them. Buyers see the low priced homes and expect turn-key homes to be available at the same low prices. Again, it’s important to use hyper-local comps to get a real sense of what homes are going for.
Average Sold to Asked Ratio
The percentage a house sold for under or over the last asking price (not the original price)
The higher the number, the better the market, and this number continues to rise. The average sold to ask ratio for February, at 96.82%, is higher than any February since 2014.
Homes that sold at 100% or more of last asking price
This number is rising quickly. The higher the number, the hotter the market!
Units Sold
Numbers are up over the last 5 years. In 2014 only 1700 homes sold in all of Sussex County. In 2017, that number has almost doubled. February 2018 numbers are higher than February in the previous four years.
Note
Melissa Bressette, Marketing Director for the Green Team, asked what impact rising interest rates were having. According to Angela Murphy of the Warwick NY office, despite rising interest rates, good connections with mortgage lenders can ease buyers’ minds and work with them on financing homes. Rates are still pretty low and affordable. If homes are priced correctly, there is usually a $10-$15,000 spectrum from asking price to where it’s sold. Comps of sold properties are more important than comps of properties that are for sale.
It’s Launch Time – that “friendly” little competition that inspires Green Team Sales Associates to start the new year off right by building on and enhancing the skills that will lead them to deliver excellent client service throughout the year.
Focused around essential daily activities that utilize the Green Team’s custom-designed CRM (customer relationship management) system, sales associates compete both on individual levels and as part of teams. The CRM features a unique gamification component that tracks competition activity and enables everyone to see real-time competition stats throughout the entire contest, giving associates that little “push” they might need.
The Launch Competition has been going on how for just over a month and it is something Green Team Associates take very seriously. Yes, they are having fun. Yes, they are enjoying strategizing. And yes, they definitely enjoy winning. But they also enjoy the possibility of winning some amazing gifts. Prizes are awarded to the top three individual sales associates and the top team!, and this year the prizes are HUGE!!
The agent with the highest overall points at the end of our Launch Competition will receive a full conference pass to Inman Connect NY 2019 and 3-night hotel stay in New York. This exceptional prize is being provided by Jeremy Miller of First Home Bank.
Additional prizes are awarded to individuals that achieve second and third place as well as the team with the highest overall points.
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