Housing Market News February 4, 2019

January 2019 Housing Market Update

The Green Team’s January 2019 Housing Market Update was held on Facebook Live Tuesday, January 15 at 2 p.m.  If were unable to view the webinar live, you can watch it at your convenience here. You can also sign up for future updates at GreenTeamHQ.com/hmu.

This month’s panelists…

          

Geoffrey Green, President/Broker of Green Team Realty, moderates the monthly webinars.  He also presents national statistics, together with local updates for Orange County, NY and Sussex County, NJ. This month he is joined by Carol Buchanan of Green Team New York Realty, Keren Gonen of Green Team New Jersey Realty and Patrick “PJ” Keelin of Family First Funding.

 

The National Outlook

 

The above charts are raw numbers – the number of homes that were sold from 2014-2018.  It appears that things are softening a bit, but it doesn’t appear that it will be drastic.

The analytic showing inventory levels is important.  It has been difficult to find homes for buyers over the last few years. However, it appears that inventory levels may be coming back a bit. Lower demand should yield more inventory, but hopefully what some inventory may do is bring some people back into the game who may have been been frustrated previously.

 

 

This survey of experts, market analysts, etc. addressed the question, “What Will Home Prices Do in 2019?”  100 people were surveyed and 94% projected that housing prices on a national basis will continue to appreciate. Geoff aligns himself with that 94%.  He believes that in 2019 prices will come up again in spite of the fact that activity went down.  Price always lags activity.

According to Geoff, this quote from Goldman Sachs is a good one.  “Despite the headwinds facing the housing market going into 2019, we expect U.S. house prices to generally achieve a soft landing. We expect national average price appreciation to remain positive.”  If this comes true, it’s music to Geoff’s ears.  He lived and worked through the last downturn, where 50% of the number of homes that sold went away within a 2-year period of time once the market starting declining. It was a difficult time

 

 

The percentage of Americans who believe homeownership is a good investment continues to increase.  The market is at a peak and confidence continues to increase.  However, Geoff finds that people tend to buy high and sell low. They should be buying low and selling high. The bottom of the market, 2011, 2012, and 2013 would have been a good time for investment.

However, people are confident that it’s a good time to buy now. And one thing that will never change is that homeownership is a good thing.

January 2019 Local Housing Market Update for Orange and Sussex Counties

Units Sold

 

Five year look back.  The thick green line is 2018 and while it’s been a mixed bag throughout the year, we ended up just a tad bit lower than the past two years.

 

In Sussex County, Units Sold was also a mixed bag, with one of the lowest totals in almost 4 years.

 

Average Price

In Orange County, prices were up substantially for a good part of the year.  However, there was a cooling-off period towards the end of the year.

 

Sussex County never saw as much of an appreciation as Orange County did.  However, 2018 was still a leading year over the past 5 years.

 

 

Asking to Sold Ratio

 

 

What price do homes on average sell for versus the last asking price?  The higher towards 100% the hotter the market. The numbers have been strong for Orange County throughout the year.

 

 

Sussex County was strong in this category throughout the year.  However, it hit its highest point in December 2018 with a ratio of 98.50%.

 

 

Panel Discussion

Geoff asked Carol Buchanan and Keren Gonen what they think of the market, as it appears a softening is underway.  Carol stated that inventory is still low, and January and February are common months for the market to slow down.  Carol does believe that 2019 is going to be a very good year. People seem undaunted by higher interest rates.  Still a lot of buyers; just not enough homes.

Keren also agrees that 2019 will be a very good year.  She thinks that people will start listing homes for sale within the next few months.  Right now buyers are looking but there is still not enough inventory. She feels there are sellers sitting on the fence, not sure what to do and just holding out for a few more weeks or months.  Geoff commented that the bread and butter of the season is March through August.  So it’s natural for many homeowners to wait until March to list their homes.

Talking with Keren regarding foreclosure activity, Geoff asked if she see a decline?  Banks are fixing up houses and putting them up at market prices.  If the quality of work was good, that would be fine.  However banks are bidding jobs out and the resulting work is not necessarily good work. Buyers expect to see good quality and are disappointed with what they’re finding. They often would prefer to pay more for a house that is in good shape. Therefore, many of these homes being sold by the banks are just sitting on the market. Banks are now competing with flippers who, generally speaking, do a better job at fixing up homes than the contractors. Buyers most often prefer paying full price for a home that was  “flipped” well than on an REO that was not done well.

Geoff mentioned that this was not the trend in the past.  Banks would not fix up their properties and try to sell them for more money.  They’d just try to unload them at lower prices and buyers could get a good deal.  Over the course of time we’ll see if banks decide to go back to the way they used to handle foreclosures.

Regarding the financing environment,  Geoff asked Patrick “PJ” Keelin what we’re looking at for 2019.  As Geoff put it, at the end of the day we’re really in the land of the banks, dependent on what they’re willing to do. And how many times the Federal government is willing to let banks leverage their money.  PJ indicated that on a global scale, at the end of the year there was talk of the Feds raising the interest rate. That usually indicates a stronger economy; stronger aspects coming from the financing angle and mortgage-backed securities, etc.  Unfortunately, at the end of the year there was a huge difference and the Dow dropped significantly. The drop in the Dow affected reports of things they were coming out with. So trends and thoughts of increased interest rates by the end of the year through that New Year boom fizzled out.  There are reports that there is potentially going to be a decrease in interest rate for the year 2019. PJ believes that is something being put out there for a little bit of hope.

However, the biggest thing we’re competing with is the lack of inventory and what people will be able to purchase.  Looking at an average household income of $60,000 to $70,000, that probably puts a person on average of what they can afford in terms of a property at $1,500 to $1,600 range. That gives them a certain price point that they have to stay in, and with increases in interest rates that is going to affect their eligibility to  be able to purchase properties within a certain price range.

Geoff stated that all signs point to Fed raising interest rates. He asked PJ if  he thinks that won’t be the case in 2019. PJ replied that there will be a lot less than they were expecting in 2018. They may skip the first interest rate rise. Hopes on the industry side are that there will be a potential interest rate drop. That may push that boom for people who are still sitting on the edge.  He sees a stronger trend with the amount of people who are actually motivated in purchasing. They may finally be believing the reports that interest rates are not going to stay historically low and will go up. So many reports are going in different directions that it’s unsure what to make of it. Industry leaders are saying the market is staying relatively steady, but be prepared.   There could be a drastic change.

Right the now trend is slow and steady. PJ commented that Geoff is proactive in all that he does; communicating with his sales associates and with the lenders they work with. Because ultimately these transactions need to happen quickly in order for them happen.  When they remain open, bigger changes are coming.

Geoff wrapped up, saying that at the end of the day, interest rates are impacted by bond markets.   As long as there is no major economic collapse, the housing market should be fine. He predicts a good 2019. PJ agrees, that it will be a good, strong year. People are getting more motivated.

Join us for the next Market Update

The next Housing Market Update will be held on Tuesday, February 12 at 2 p.m., when the Green Team will again be going live on Facebook. Sign up for updates at Greenteamhq.com/hmu.

 

Housing Market News December 10, 2018

November 2018 HOUSING MARKET UPDATE

The Green Team’s November 2018 Housing Market Update was held live on Facebook Tuesday, November 13 at 2 p.m.  If you missed the live webinar, you can view it at your convenience by clicking here.

You can also sign up for future updates at GreenTeamHQ.com/hmu.

 

Meet this month’s Panelists…

Geoffrey Green , President/Broker of Green Team Home Selling System, moderates the monthly webinar and presents the national stats, as well as the market updates for Orange and Sussex Counties.  This month he is joined by Pam Zachowski and Keren Goren of Green Team New Jersey Realty and Vikki Garby, Green Team Home Selling System, Warwick.

 

 

 

 

 

 

 

 

 

 

 

Joe Moschella, Branch Manager and Vice President of Lending, and Amy Green, Vice President of Lending, of Guaranteed Rate discuss market updates from a mortgage industry perspective.

 

 

 

 

 

 

 

 

 

The National Outlook

According to Geoff Green, it’s a very exciting time in the housing market right now as we’re starting to see some shifts. We’re experiencing all-time highs reminiscent of 2008 over the last 18 months.  It does seem like things are cooling off.  According to Michael Fratantoni, Chief Economist of the Mortgage Bankers Association, he expects that home sales growth will pick up again over the next year, even with somewhat higher mortgage rates, though the pace of price growth will likely slow.

Despite the fact that national and local numbers indicate that the velocity of homes selling is actually slowing, Fratantoni and some others are predicting that it is going to increase in 2018.  So, it’s not that appreciation is going down, it’s just slowing down.

The Mortgage Bankers Association, National Association of Realtors, and Freddie Mac, with the exception of Fannie Mae, all are predicting increases over the past two years.  All are predicting increases over the past year.  For the most part each of these organizations wants the housing market to continue to grow.  Geoff reminds us that it’s in their best interest.  It’s important to be aware of the source of information.  During the downturn In 2006, 2007 and 2008, during the downturn, some organizations were  putting out information that did not accurately portray what was happening. However, you can rely on the Green Team to put out information that is accurate and honest.

 

In projections for 2018 through 2022, everyone seems to have a positive outlook that the market will continue to appreciate.  Just at a slower pace.

 

November 2018 Housing Market Update – Orange County

Units Sold

While this is hyper local, it is reflective of the 2018 national numbers.  While prices may increase and decrease, depending on inventory, units sold have been a mixed bag this year versus last year.  It’s been up, it’s been down.

Average Price

Geoff has found that price always lags activity, according to his observations over the past 14 years.    If you start to see a slowdown in activity, 6 to 8 months later you’ll start to see a slowdown in the rate of price increases.

Sold to Asked Ratio

This is telling you at what percent of the asking price your home is selling for.  The closer you are to 100%, the hotter the market.  While this took a little dip recently, it is still at very high levels.

 

November 2018 Housing Market Update – Sussex County

Units Sold

This is a small data sample that is still reflective of what is happening nationally.  Again, it’s a mixed bag, up, down, then often flat.

Average Price

Average price never really gained a tremendous amount of traction, as compared to Orange County, where there had been increases in price.

Sold to Asked Ratio

This looks similar to what is happening in Orange County.

 

Panel Discussion

The Sales Associates Points of View

Geoff asked Vikki what changes she’s seen since she was last on the panel about 4 months ago…  Vikki agreed that she has been seeing a little bit of a slowdown, part of which she believes is due to timing.  Many families time their house hunting to coincide with the start of school.  However, what she’s finding is a lot of people are looking for land.  Historically, we’ve had low inventory compared to the number of buyers, And, as existing house prices go up, more people are starting to consider new construction.   Housing starts will be up 9% beginning of the coming year.   So there is still a lack of inventory.

Pam also sees a slowdown.   More people are looking for homes, but between the low inventory, the start of the school year, people are taking their time.  She still sees investors trying to buy and flip homes but finding it harder and harder to find that good deal that makes it worthwhile.

Geoff then asked about appraisals. Are there issues with properties appraising, or are there now enough comps in the marketplace?  Keren has not seen any problems recently.  They’re all coming in at asking and a little bit above.  One thing she has noticed is Sellers asking for CMA’s or listing presentations, more than she had over the summer.  Keren always advises clients that we only know what the market is right now and can’t tell where it’s going.  She lets them know that low inventory makes it a good time to put their home on the market, as opposed to waiting for Spring, Geoff replied that sellers that were holding off putting their home on the market may now decide to take a chance, seeing that the market is cooling off a little. This may ultimately bring more inventory and more transactions to the marketplace as a whole.  There are still many buyers out there, anxious to find a home.

A Mortgage Industry Point of View

According to Joe Moschella, over the last 5 months they’ve seen a steady rise in interest rates.  The year started with a 10-year treasury note at 2.21% and this week it was 3.21%, one full percent.  That, along with the Fed stopping its purchasing of mortgage-backed securities, caused a liquidity crunch in the market.  This contributed to pushing rates up.  They started the year with 4% on a 30-year fixed rate and are now closing in on 5%.

Geoff asked Joe what the bond market was like 4 years ago on a percentage basis,  just to give some perspective. Joe brings it back to 9/11, when the Fed didn’t want to see the economy spiral down. They jumped in and started dramatically dropping rates, bringing them down to almost zero.  Now we’re seeing the unwinding of these artificially low rates.  Thankfully the Fed eased into this, providing a “soft landing.”  2.21 to 3.2% represented about ¾ of a percent, interest rate wise.  About 2, 2-1/2 years ago we were at 1.2% on the US Treasury.  Before that, we were at the 0.7, 0.8% range. We’ve seen a steady rise, which hopefully the economy is strong enough to handle.

Some of the other changes in the market on the mortgage front are in the role technology is playing. Lenders are able to verify client’s income and assets automatically, do the application online and do the process without sending any paperwork back and forth. The whole process is done digitally.This is revolutionizing the industry and leading to higher consumer satisfaction.  The industry is also easing credit standards.  Geoff asked if easing credit standards was necessarily a good thing.  Joe responded that rising rates have opened the door for new loan products to come out. Those new products are not coming from the banks, but rather from private equity firms flowing back into the market.  No verification loans do not exist, but they have a bank statement loan that has come back into play.  No seasoning waiting period for someone who had a foreclosure or bankruptcy or short sale, whereas before you had to wait three, four or seven years. Geoff stated that if you’re talking about private equity, they basically can do whatever they want with their money, as long as those products don’t make it into mortgage-backed securities. He asked if there were any controls in place to make sure that didn’t happen again. The trade-off with non-conforming products is that the buyer has to have some “skin in the game.”  They need a sizeable down payment, and investors want higher return for higher risk, so rates may be at the 6-1/2% range.

Geoff said it’s important to keep things  in perspective.  The sky won’t be falling if rates hit 6-1/2%! Historically, it’s a pretty average rate.

Joe and Amy had a graph showing 10-year treasury yield minus 2-year treasury yield.  Historically when those yields come together, it signals a slowdown in the market or a recession.  From Joe’s perspective, we might have a slow down in the stock market and see a pull back, but he’d rather see a market that goes up and goes down.  In a stale market buyers and sellers are sitting on the fence; there is no call to action.  As far as housing goes, everyone can do well and make some money.

Geoff thinks there is enough pent up demand from 2008 to 2016; there are a lot of people who need to buy a home and rates are still low enough.  The American housing market is the place to be in the Global real estate market.   There may be a continued cooling off and slow down a little.  We’ve been at such high levels right now, it had to.  Like the stock market, it can’t keep going up indefinitely; at some point it has to come down.

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Please join us for the next Housing Market Update

December 11, 2018 at 2 p.m.

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GreenTeamHQ.com/HMU

 

 

 

Housing Market News November 9, 2018

October 2018 Housing Market Update

The Green Team’s October 2018 Housing Market Update was held live on Facebook Tuesday, October 16 at 2 p.m.  If you missed the live webinar, you can view it at your convenience by clicking here.

You can also sign up for future updates at GreenTeamHQ.com/hmu

Meet this month’s Panelists from Green Team New Jersey Realty and Green Team Home Selling System

Geoffrey Green, President/Broker of Green Team Home Selling System, is the moderator of the monthly webinar and presents stats and market updates for Orange and Sussex County. He is joined this month by Keren Gonen,  Pamela Zachowski and Alison Miller of Green Team New Jersey Realty in Vernon and Jacqueline Kraszewski of Green Team Home Selling System in Warwick.

  Keren Gonen         

Market Update – The National Perspective

A look at Total Home Sales Nationally

Things seem to be shifting in the housing market.  For Geoff, the stats of homes sold are the “mother’s milk” of the industry.  Nationally it’s been a mixed bag through 2018. September’s numbers are not yet in, but August numbers for total home sales were just about even for 2017 and 2018.  It appears that things are shifting in the market, with the number of sales not increasing like last year, year over year.  However, foot traffic in August was much higher in 2018 than in the same period in 2017.

Buying versus Renting…Which is the best way to go?

Lawrence Yun, the economist of NAR, has said that we’ll probably see growth in terms of the housing market on the lower end because the job market is strong.  People are working, making money and want to invest their money in real estate.  However, there may be a slowdown in the higher end because interest rates are rising.  How does affordability of renting compare with buying?  There is a steep curve, not a good outlook for renters. Since 2013 it has been cheaper to buy instead of rent on an overall national basis.  If you have the ability, it costs less to buy than to rent on an overall monthly basis.

October 2018 Housing Market Update – Orange County

Units Sold

As stated before, Geoff sees this number as the mother’s milk of the housing market. This all-important number gives us a snapshot of how many homes are selling.  The number of units sold in Orange County appears to be cooling off. He believes we’ve seen the peak of the last runoff and that it’s behind us. Geoff’s view seems to be backed up by an article that appeared last week in the Wall Street Journal, which referred to a soft downturn in the market.

Average Price

There is a big variance in price from where we were last year.  The downward trend is a seasonal fluctuation and not a cause for concern.  Price always lags units sold at least 6 months or more.  Price increases may occur over the next 6 to 12 months, even though the number of units sold is dropping.

Average Sold to Asked Ratio

We are still pretty high, still over 98%, which means sellers are only having to negotiate 2% from their asking price.

October 2018 Housing Market Update – Sussex County

Units Sold

A similar trend to Orange County, where some months are up, some down, on a year over year basis. It’s a mixed bag, and the numbers seem to indicate a cooling off.

Average Price

Average prices never rocketed in Sussex as they did in Orange County.  In previous updates, we’ve spoken about how there is simply more foreclosure inventory and activity which has dragged down the average.  However, that doesn’t mean that homes that are well maintained and well located haven’t done well.

Average Sold to Asked Ratio

Average price never rocketed here like it did in Orange County.  There has been much more foreclosure inventory and activity in Sussex and that has dragged down the average home price. However, that doesn’t mean that well-located, well-maintained homes haven’t done well.

Slightly below Orange County, the numbers are still hovering around 98%.

Panel Discussion

The Sales Associates Point of View

Geoff believes the market is cooling.  He asked the panelists what they were sensing in the field. Keren replied that there are fewer houses that are updated and nicely done, and buyers have higher expectations.  During the summer, people were rushing to find homes in order to get situated before the start of the school year.  Without that added stress, many buyers are being pickier.  Alison finds that people are looking for something that is just not there.  Inventory is not meeting the demand.  In addition, many of her closings were delayed, affecting numbers for September.

Jacque is finding that there is a lack of finished, move-in-ready homes under the $400,000 price point in Warwick.  In addition, many families with school-aged children are waiting for the spring to resume their search.  Also, the seasonal fluctuation impacts the market as people are beginning their holiday preparations.  Pam is also seeing the issues mentioned by the other sales associates.  The inventory shortage, buyers being very picky, even homes that have been flipped that aren’t good enough.  It’s difficult for people to find what they’re looking for in their dollar amount.

Geoff summed up these comments by stating it is still a very good time to sell a house.  However, there is nothing to stop the housing market from slowing down.  Thus he advises sellers not to put off listing their home if they are planning on selling.

Guest Panelist, Matt Zagroda, discusses the bond market…

Matt Zagroda is a Sales Manager at MBS Highway, the leading provider of real-time market data for mortgage professionals.  As such, Geoff welcomed his input on the bond market. Geoff asked Matt what is happening with the bond market, as rates seem to be increasing by the minute.  Matt explained that at the end of last year the Fed wanted to do quantitative tightening.  Previously they had been reinvesting gains from the bond market back into the bond market, which brought their balance sheet up greatly.

They wanted to wind that balance sheet down and made a plan just before Janet Yellen stepped down as Fed Chair.  So, October of last year they wanted to reduce it by $10 billion. January of this year, $20 billion, April $30 billion, July $40 billion and October, $50 billion. That was the last tightening session.  They weren’t going to continue to reinvest it.  There is no Fed buying into the bond market, which is why we’re seeing changes in interest rates.  There was a drop in the bond market and a rise in rates.

Matt expects that in the upcoming months we’ll be experiencing volatility.  However, this is actually a more normal bond market.  If there is any economic news that would potentially hurt bonds, we’ll notice it more.  Previously the Fed was buying back into it, softening the blow, creating almost a safety net.  Now there is no safety net, so if it’s going to hurt – it’s going to hurt.  That doesn’t mean that if there’s good news that it will be the opposite and that it will help the bond market…  Again,  the Fed is not juicing the good news to buy and make that increase even more so.

More volatility is expected into the future, potentially more to the downside, but it’s not expected to be a straight downward line.   Rates may continue to get worse, though the hope is that they’ll remain steady.  Much depends on what happens with the Fed and their plans for rate hikes.

Geoff recalled buying his first home around 2003.  His 30 year fixed rate was at 6.5%.  We’re hovering now at about 5% now.  Matt agreed that was about right.

Looking back, it hasn’t been higher than this since 2009.  Previously, it was much higher.  Rates have been pretty much below 5% since then.  The largest run on the housing market was 2005, 06, 07 and rates were pretty high back then.  The rates may impact the mortgage industry insofar as refinancing.  However, when rates eventually come down, the refinancing market should open up again.

… the stock market, and global contagion

Geoff asked Matt his thoughts on the stock market and its unbelievable run.  Matt expects that eventually we can’t go much higher and things will come back to a more normal range.  Not a crash, but just a more normal range that will help bonds and interest rates even a little bit. When money comes out of stocks it is generally invested in bonds, especially when there’s talk of trade wars, etc.  When there is uncertainty in the market, many people invest in safer, long-term investments like bonds.

Geoff had a final question…  The idea that there could be a global contagion. By and large, there is a lot of risk around the globe. Many governments are not in a good fiscal situation. Currencies are all over the place. There’s a lot of risk around the globe.  The US seems like the shining city on the hill, on our own pedestal for some time.   He asked Matt his thoughts on the global market. Matt replied that there is turmoil in Europe, and especially Italy right now.  The world is interconnected. However, we’re not expecting great leaps and bounds right now because of that turmoil.  However, it does affect us.

In closing, Geoff recommends the article he mentioned at the beginning of the update.  Written by Laura Kusisto, it was published in the Wall Street Journal on October 13.  “Housing Market Positioned for a Gentler Slowdown Than in 2007″  provides a good, historical outlook on the market and its future.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Housing Market News August 30, 2018

August Housing Market Update

The August Housing Market Update was held live on Facebook on Tuesday, August 14, at 9 a.m.  If you missed the live webinar, you can view it at your convenience by clicking here.

Next month, the Housing Market Update webinar will take place on Tuesday, September 18 at 2 p.m.  You can sign up for updates at GreenTeamHQ.com/HMU.

 

Meet the Panel

Geoff Green

Keren Gonen

Patrick Keelin

Jeff Lobb

 

 

 

 

 

 

 

 

Geoff Green moderated the webinar and presented statistics for Orange and Sussex Counties.  Keren Gonen, of Green Team Real Estate New Jersey and Green Team Home Selling System, gave her perspective on the market from the sales associate’s view.  Guest panelists were Patrick Keelin, Branch Manager of Family First Funding’s Warwick office, and Jeff Lobb, Founder and CEO of SparkTank Media.  Green Team’s Marketing Director, Melissa Bressette, was on hand to make sure everything ran smoothly.

Housing Market Update – National

 

 

Nationally,  for the last two months, the number of homes selling is down slightly from 2017.  Earlier in the year it was almost even. There is a mixed bag, not a continued trend. Common knowledge says it’s all about inventory.  There are just not enough homes for all the buyers out there.

Pending home sales seem to be trending downward nationally.

The National Association of Realtors shows year-over-year inventory levels up for the first time in 36 months.  It may be a good sign, though it may also be indicative of the market slowing a little.  However, foot traffic is up in 2018, compared to 2017.  This graphic represents the numbers of people actually in homes, looking to buy. This number has been up consistently all year, though sales are down on a national level.  From a national perspective, it’s still a very solid market.

From 1985 to 2000, 21% of household income was dedicated to mortgage payments.   In the first quarter of 2018 we’re well below that number.  At 17.1%, we’re about 4 points below the historical average over the last 25 years.  Therefore, even though prices are rising and inventory is tight, homes are still relatively affordable compared to 1985 to 2000.  Even if rates do get to 6% or so, household income dedicated to mortgage payments will be only a few points higher than the 1985 to 2000 average.

Housing Market Update – Orange County, NY

Getting down to local stats, although at a slowing pace, the numbers are still at historical levels.  In our area, where the current number of homes selling is the equivalent of 2006 (which was one year after the absolute peak in the market that occurred in 2005), the rate of sales is historically very high.  This is a very hot market.

Average price is clearly rising in 2018.  Geoff noted that in his experience units sold would increase, but average price didn’t quite get there.  Then, units sold would start to decrease but price didn’t follow that trend, with a lag of about 6 months.  There was almost a 2-year lag in average price that came after the downturn in the market.

Approximately 40% of homes are selling at 100% or more of their last asking price.   There are a lot of bidding wars going on, and this is indicative of how hot the current market is.

This number continues to decline, another sign that this market is hot.

Housing Market Update – Sussex County, NJ

The stats are showing a fluctuation in the number of units sold in Sussex County.  It’s a mixed bag – some months below, some months above. No definitive trend has emerged.

Not quite the lift-off that’s occurring in Orange County, but after the first two months of 2018, there is a definite rise in average price and July is at the highest point of the last five years.

While not quite as high as Orange County, between 30 to 40% of homes are selling at 100% or more of last asking price.

We’re seeing a similar trend to New York, with homes selling at around the 90-day mark.

Keren Goren – A Sales Associate’s Perspective on the Market

Geoff asked Keren Goren, one of Green Team’s top producers, for her thoughts on the current market.  Licensed in both New York and New Jersey, Keren finds that there are many prospective buyers for both Orange and Sussex Counties. Lots of bidding wars are going on.

She does feel that some of the flippers in the area are doing less and asking for more.  This appears to be a new trend.  Keren recalled that flippers used to do a much better job, but many houses on the market now are unfinished and are scaring buyers away as opposed to inviting bids.  Therefore, some outdated homes are actually selling for prices higher than they should or would have a few months ago.

Keren sees no sign of the market slowing down.  However, she is seeing delays in closings due to issues with some mortgage companies, and with buyers making poor decisions with their finances. Keren did note that her experiences with Family First were extremely positive, and she highly recommended them.

Geoff noted that the current market upturn stands a chance at longevity.  Following the downturn, as deep and as long it was, people weren’t moving.  Banks have since cleaned up their balance sheets, tightened programs up, and are making money. There are fewer defaults happening.  Basically, everything depends on how much money the banks are willing to lend.

PJ Keelin – A Lender’s Perspective

The mortgage industry is doing well, offering a lot more first-time homebuyer programs with as little as 3% down, USDA becoming very popular in Orange and Sussex County areas.  Also trending is loosening up a bit and coming up with more portfolio loan products, personal products and using common-sense underwriting and ability to fund when looking at today’s borrowers.

With homes in the $200,000 to $300,000 price range becoming few and far between, they are looking at different programs, such as adjustable rates, less money down, and interest only type payments.  However, in these cases, information and education should be given to borrowers upfront.  It’s necessary to prepare the borrower for everything that will come together throughout the process.  It’s extremely important for borrowers to be aware of what they are getting into with these products and understand how they work.

Geoff noted that with the last downturn, banks were not requiring people to have much “skin in the game.” Zero down, lying about income, jamming loans through.   Geoff asked if PJ was seeing any of those practices coming back, or if there remains more oversight. scrutinizing income and the buyer’s comprehensive financial situation, down payments, etc. before loans are going out.

PJ replied that FANNIE and FREDDIE are doing a great job operating more with common sense with people who can have a little more risk, etc.  They are requiring more skin in the game.  Banks are protecting themselves and borrowers by not letting people put themselves under water.

Where are mortgage rates headed?

Geoff noted that the Fed has been raising short-term interest rates and will probably continue to do so to stifle inflation.   He asked PJ where he saw mortgage rates landing over the next 12 to 18 months.  PJ answered that he believes rates will be consistently in the 5’s through most programs.  The market is being built into where those rates are and is slowly trending. Supply and demand are balancing each other out.   Geoff feels that if you buy now, the value of your home won’t drop out like it did 12, 14 years ago.  Pricing levels appear to be realistic and should hold for some time in the future.  Buyers want to know if the asset they’re buying will be worth at least as much or more than they’re paying now.  Even though it is a seller’s market, Geoff and PJ concurred that it is a good time to buy.

Furthermore, PJ stated that appraisers are not allowing appraisal inflation to come above where the market truly should be.  It’s better for appraisers to be a little tight because that will keep the longevity of this strong market going on for 12, 18, 24 months.  Geoff replied that appraisals have been challenging over the last 3 years.  Prior to the upturn, prices were a mixed bag, leaving appraisers unwilling to take a chance as they couldn’t see where the market was going. However, he noted that now some appraisers are more willing to take a chance and make an allowance because of the steady upward-trending market, even though there might not be a comp that can exactly substantiate it.  There are fewer appraiser issues, though there are still times when they won’t go along with the offering price.  This hurts the seller but protects the buyer. And it’s another way of controlling the market.

Jeff Lobb – A Marketing Expert’s Perspective

Geoff asked Jeff for his views on the future of service providers in the real estate industry in this age of technology.  Are realtors going to be the next victims of business models like Amazon?  Will technology replace realtors just as retail stores (like ToysRUs) and their employees have been replaced?

Jeff’s view?  While buzzwords like “disruption” do sell media, there are things happening at higher levels.  However, the real estate agent is not going away anytime soon for one simple reason.  There are too many moving parts to a transaction, and emotion is one of those.   Technology has not reached the stage where it can handle all these parts.

Disruption occurs with more brands trying to change the way we are doing business, making it faster, more tech, or more niche. New companies are coming into play.   Compass,  Redfin models, Purple Bricks.  And new people are coming into the space trying to change and elevate what we do.  At the same time. the industry has seen some large teams leave major brands, saying they can do things better by themselves, without the big brand box.

Taking care of business…

One way to keep track of business is to every day look at local inventory.  If there are 500 listings, see how many of those you got.  If it’s only 2, there is a lot to be done.  The business is a marathon; it’s a competitive race, but not many have enough drive to do the hard work that’s needed.  To say the business is slow is not valid.  Every day more homes come on the market and more get sold.  Someone is getting those listings.  And that is where the challenge comes in.  It’s about doing the day-to-day work.  All the technology that is available can make us work faster and smarter, but we still have to do the work.

Philosophically speaking…

Geoff has a broader perspective as to where realtors stand and what the future holds.  As an example, despite all the tools available online there are more travel agents now than in the year 2000.  It takes time to do all the research, etc., and many people are finding it more desirable to hire someone to do that work for them.

There has been an explosion of information and technology, but at the end of the day, it’s time.  Do most people want to spend the amount of time it takes to properly sell their house or negotiate to buy a home?   Most people prefer to hire a real estate professional to handle all the parts of the puzzle.  In addition, Geoff believes the housing market is important to the overall US and global economy.  The economy is revving. largely because of the housing market healing and coming back. And real estate agents are critical to the health of the economy.

Jeff added, “Will Amazon and Facebook get into the real estate marketplace?  Probably!”  The big picture is that some companies are coming in trying to acquire agents and market share. Others are trying to change the way technology is driven.  However, you still need the people to execute the transactions and deal with the emotional process of a sale.

Geoff’s final analysis?  We, humans, are complicated beings, and it takes a human to navigate this process of buying a home.    And after much consideration,  we should continue to invest in real estate agents and our industry because we’re needed and timeless.

Visit our website, greenteamhq.com/HMU to register for our next Webinar on Tuesday, September 18 at 2 pm. You can also view previous webinars videos and access other recaps like this.

 

 

Housing Market News August 1, 2018

July Housing Market Update

The July Housing Market Update was held live on Facebook on Tuesday, July 10, at 9 a.m.  If you missed the live webinar, you can view it at your convenience by clicking here.

Meet the Panel

Geoff Green moderated the webinar and also presented relevant statistics in a historical context.  Keren Gonen of Green Team Real Estate New Jersey conveyed the sales associate’s perspective on the housing market.  Melissa Bressette, Green Team’s Marketing Director, rounded out the company’s participants.   This month’s special panelists were Kevin Dolan,  Branch Manager and Co-Director of Renovation and Construction Lending at Annie Mac Home Mortgage and Joe Panebianco, CEO of Annie Mac.

Orange County Historical House Price Index

Geoff presented a historical view of national and local prices, and a look at the market before, during and after recessions.   In this chart of the Orange County, NY price index, gray bars indicate periods of recession.  As shown in the graph, recessions don’t necessarily trigger downturns in the housing market.  The inverse is usually true, with downturns in the housing market generally triggering recessions.  Exceptions include the recession between 2000 and 2005.  The housing market actually started to downturn around 2005, long before the financial collapse of 2008. Prices peaked in 2006, then continued to slide for over a decade.  The steepness and duration of the curve is what is of special interest.

Sussex County NJ Historical House PriceIndex

In a historical context, the Sussex County and Orange County stats show a similarity, reflecting national trends.

National Stats

In Total Home Sales in thousands there are no major increases in the year over year stats.

The number of houses available in lower price ranges is way down.  However, there is an uptick in higher priced homes.  Because of lack of inventory, buyers are being pushed into that higher price bracket.

The percentage of distressed properties for sale is way down from 2012.

Orange County Market Stats for June 2018

Units Sold

According to Geoff, this is one of the most important analytics in the housing market.  No matter where pricing is, you can get an idea of the market by how many houses actually sold.   There has been a great year over year increase for the past five years, but now it’s slowing down and we’re seeing a flattening now.

Homes that sold at 100% or more of last asking price

There’s a spike in this number.  This is a hot market, and any home that is well located and in good condition will most likely have multiple offers at any one particular time.  Basically, almost half of every listing on the market is being bid over asking.   Note:  Stats are based on last asking price, not original asking price.

Average Days on Market

This number continues to decline, again showing a strong seller’s market.

A Comparison of Units Sold from 2005-2010 versus 2014-2018

Geoff researched units sold in Orange County from 2005-2010 versus 2014-2018.  Trends here follow National trends.  The peak year was 2005 in terms of units sold.  2006 was the highest  average home price the County has seen..  However, in 2010, the number of units sold had slid to almost half of the 2005 figure.  Last year, we were above 2006 numbers, and close to 2005 in terms of units sold.  Whether we’ll match or exceed that number in 2018 remains to be seen.

Recession

In a capitalist society, it is not a question as to whether or not there will be another recession.  The question is when.

As defined in Merriam-Webster Dictionary, recession is “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”  There is, of course, great interest in when the next recession will hit, and what impact it will have on the housing market.

The graph shows home price changes during the last 6 recessions, over 45 years.  The recession periods as designated by economists do not include the housing market downturns.  Historically, prices haven’t been that affected during the recession; however, the definition of recession doesn’t include the whole downturn.  And the real estate market takes time to recover.

Keren Gonen’s perspective on the market from a sales associate’s point of view…

The market is very hot, in both Orange and Sussex Counties.  In Warwick,  if you don’t jump on a house right away, you can lose it.  Keren is seeing bidding wars on homes within days of listing them.

When asked how long she thought the market would remain strong, she estimated about a year.  One of the reasons we’re not seeing the lower priced homes sold, Keren indicated, was that banks that do have foreclosures are releasing them at much higher prices.  Some banks are also renovating and flipping homes and charging even more.

Geoff commented that previously, when the market was really bad, there was shadow inventory.  Banks would hold on to foreclosures, creating fear in the market that they would dump their inventory of low-priced homes, driving down prices.  However, the banks seem to be changing their ways of doing things by renting out some homes, and fixing up others and selling them at higher prices.

The Mortgage Market – Where are we now?

Geoff stated that we’re definitely in an increasing rate environment and the Fed has signaled that they are going to continue to increase the overnight lending rates into the foreseeable future.  Geoff asked Kevin Dolan to address where we are at now…

Kevin responded that where rates are concerned, they’re turning higher for the foreseeable future.  Partly due to media coverage, people are starting to take the rise of interest rates and home prices seriously.  They see continual coverage of higher rates on news shows.  Thus, people are becoming proactive, buyers and sellers alike, driving productivity level.

Interest rates, inventory and recession. Oh my!

Joe Panebianco does economic analysis and strategy for Annie Mac.  His expertise made him the perfect person to discuss specifics and timings of interest rates, inventory and recession.

Interest Rates: We will most likely be range bound from a 10-year treasury perspective from approximately 2.75 to 3.05 yield in the ten year.  In other words, we’ll be relatively stable.  Should this estimate be incorrect, Joe believes a slightly higher rise in interest rates will not significantly hurt the housing market.  At some point, rates rising will have a deleterious effect and purchasers’ ability to afford a home may be impacted.  However, we’re not at that point now.

Inflation and economic growth are the two primary components of interest rates. Inflation has remained stubbornly low and will most likely remain so.  Hence, one reason why rates should remain relatively low.   People talk about the Fed increasing rates, but they are increasing the short end of the curve.

As the Fed continues to hike rates, the result will be 10 and 30-year rates looking more like 2 and 5 year rates.  Most of the duration of a mortgage-backed security is in a 7, 10 and 30-year part of the curve.  And Joe believes that the more the Fed increases rates, the more likely we are to be in a recession and more likely to have lower, longer-term rates remain where they are or go lower. The mortgage market on Adjustable Rate Mortgages could be hurt because they’re much more likely to rise as they’re sensitive to the shorter end of the curve.  30-year fixed mortgages are more likely to stay in the aforementioned range.

The Global Connection

We live in a globally connected network and there is a yield spread between US 10-year Treasury bond and bonds in other countries, like Germany, Japan, Australia..   For central banks, very large institutions,etc.,  putting their money in US Treasuries provides a safer, purer investment over countries with significantly lower yields.  However, regarding tariffs, trade wars are inherently bad for economies and may throw a curve ball into any predictions.

There are some who refer to our current economy as a “Goldilocks economy.”  Not too hot, not too cold, just right… in some ways.  The economy is growing enough to create jobs.  And, according to Joe, jobs are far more important to home purchases than interest rates are.   In the early 1980’s,  interest rates were at 15% and yet homes were flying off the market.  When rates go up, prices tend to come down.  And there is always a buyer, especially if there is value to be had.

The history is if the Fed goes too far, it will drive the country into recession.  Joe believes we have approximately 12 to 18 months left in this cycle. And that at the end of this period, we’ll be in a more normal market with a healthier balance between demand and sup

Factors that impact inventory

Labor, or lack thereof, is a major component.  Many significant builders have unused land on their balance sheets, on hold because of the great recession of 2007 to 2010. About 70 to 75% capacity of the productive capacity of the home building industry was lost.  Brick layers, sheet rockers, carpenters, plumbers, electricians,  etc. – left the industry to seek employment in other fields.  In addition, when major storms hit Texas, Florida, etc., many people in the industry picked up and went to work  in those cities where they could make much more money.   There are simply not enough craftsmen and laborer to build all the homes necessary to meet current need.

Municipal Fees, laws –  Fees, regulations, etc., have made building a home both difficult and expensive.  To help increase taxable base, some municipalities are now trying to make things a little easier for those seeking to build new construction.

Tariffs – The “War of Words” regarding trade with Canada is not good news for the housing industry.  A disproportionate share of home building lumber comes from Canada, and price of lumber futures has already risen on expectation of tariffs.

Easing of Credit

In the next 12 months, we may see easing of some requirements.  At this time, no one knows how this will be done. However, some options might include reducing Mortgage Insurance on the FHA side, especially for first-time buyers.  Also, Freddie Mac might follow Fannie Mae’s lead in reducing Long Term Debt and Debt to Income Ratio.  Average renters spends 50-55% on rent.  However, the current Debt To Income ratio is in the low 40’s for purchases.  There might be a move to update the DTI.

Demand is not going to Cease

According to Joe, by 2025 there will be approximately 10 million new household formations.  35% will be from millenials, 35-40% from among the Hispanic community (with some overlap between the two), and 10% from the African-American community. Many of these new home buyers will be DTI (Debt to Income Ratio) challenged.  They will need the services of qualified real estate agents, knowledgeable mortgage specialists/

Geoff pointed out that purchase and rental markets are both hot at the same time. This indicates a true housing shortage.  The Millennial population seems to be exceeding Baby Boomers. Pent up demand and limited supply serve to elongate and stretch out the cycle.

Home ownership improves communities – and the economy

Home ownership lends itself to not only building communities, but also to building up business, including home improvement and furniture stores, furniture stores, durable goods vendors, etc., etc.- all of which will help the economy.  Inventory may become less of an issue month by month by month.

Renovation Loans

Kevin Dolan is an expert in renovation loans.  There are homes on the market that just won’t sell because they are not in good shape.  He believes the renovation lending program is under-utilized simply because it is not understood and there are many misconceptions.

There are two types of renovation loan programs – conventional and FHA.  This opens up versatility for buyers as to who it can serve, such as a down payment as low as 3-1/2%.  It also allows for lower credit scores.   These loans can be utilized for primary homes, second homes and investment properties.  The loan allows for someone to buy a house in need of repair, and have an approved, qualified contractor bid on work to be done.  Depending on scope of work, sometimes a HUD consultant will make sure prices quoted for the work are appropriate.  The renovation funds goes into an escrow account, and contractor has specified time to do improvements, usually within six months. The bank pays contractor directly. The process is streamlined and efficient.

Kevin feels that educating buyers and real estate agents alike is key to opening up this market.    Keren agreed, stating that she often does sell homes by telling buyers that renovation loans are available, and explaining how they work.  It opens up options and vision for the buyers who cannot afford to buy a home in the $300-$400,000 range.  Annie Mac does have a certification program available for real estate agents who would like to become expert in this area.

Renovation loans – not just for buyers

Kevin commented that renovation loans can also be helpful for sellers who need to update their homes in order to sell.  By adding another bath or more bedrooms, the value of the home can be increased so that the seller can pay off existing mortgage and closing costs, and hopefully make a profit as well. Also, from Seller’s position, if they have a failed septic tank, they can sell the home at a lower price and buyer can get a renovation loan to cover the cost of having the work done themselves.

Joe added that in looking to build wealth in addition to creating a home for their family, renovations can help improve their property, and therefore their investment.

Geoff spoke about the importance of finding someone who truly understands these loans as they can be tricky for the loan originator.    Geoff spoke highly of Annie Mac, not just for renovation loans, but for all financing needs.

Stay tuned for the next market update

The next update is August 14, 2018 at 9 a.m.  You can sign up at GreenTeamHQ.com/HMU

 

Housing Market News July 10, 2018

Housing Market Update for June 2018 & Impact of Federal Tax Reform on Housing Market

Orange & Sussex Counties – Housing Market Update for June 2018 and Impact of Federal Tax Reform on the Housing Market

The Green Team went live on Facebook Tuesday, June 12 with its monthly housing market update. Geoff Green, President of the Green Team, moderated the event. Panelists included sales associates Vikki Garby and Kim Leslie of the Warwick office and Keren Gonen and Joyce Rogers from the Vernon Office. Guest panelists were Dan Bounds, Senior Home-Lending Advisor with Chase Bank and Ed Mainland, Executive Director at JP Morgan Chase & Co. A special presentation was given by Thomas McGlynn, Managing Director of BDO Expatriate Services, on the impact of federal tax reform on the housing market.

Overview

Nationally there has been a 5.3% year-over-year increase in existing home prices. Low to middle-level houses are moving faster than higher-end homes.  However, economists are concerned about the affordability of homes for the entry buyer level. The lack of inventory is driving home prices up. The West Coast has been moving at a greater pace than here in the North East. Supply and demand is taking hold. Foot traffic stats are very interesting. There has been more foot traffic this year than last year during the same time. On a national level, existing home sales are slightly down from where they were last year during the same period.   This may be a reflection of inventory problems.

Orange County Update

Average Price

Average price has really taken off.   There was a mixed bag of results until this year.

Units Sold

May saw the most units sold for this month since 2014.  However, prior to May, this year is the first where we’ve seen more than one month at or less than the same month in previous years.  There has been a steady increase year-over-year until 2018.  We will continue to keep a watch on this analytic as it may be the most important indicator of when there will be a downturn.

Average Days on Market

The average days on market continues to decrease.   This indicates the market is hot; a good seller’s market.  For some who have been waiting a long time, now may be a good opportunity to sell their homes.

Sussex County Update

Average Price

The amount of distressed inventory (foreclosures, short sales, etc.) has stymied price growth and appreciation in Sussex.  However, the average price in May of this year is the highest it has been for this month since 2014.

Units Sold.  

There has been a substantial decrease in units sold, even with average price increasing and average days on market decreasing.

Average Days on Market

The average days on market keeps going down, indicating a hot market.

Market Q&A

Buyer Concerns – Price or Inventory?

Geoff Green asked Vikki Garby whether she got a sense that her buyers were more worried about current prices or not being able to find a home due to lack of inventory.  Vikki responded that inventory was the biggest problem. However, once they found a home, buyers were concerned about going to contract quickly.  People were getting stressed out about interest rates.  Therefore, they want to get them locked in as soon as possible since rates are rising.   Dan Bounds advised that their mortgage customers are able to get their rate locked in once they have a signed one-page purchase agreement.

Appraisals – On Point?

Geoff then asked Keren Goren if appraisals were coming in on point, or if there were still problems.  Keren replied that appraisers were coming in on point in New Jersey.  Geoff responded that in a solid, appreciated market appraisers seem to be more comfortable and confident coming in on valuation.

Inventory – Quality or Quantity?

Geoff’s question to Joyce was, “Everyone says there’s no inventory, but there are homes on the market. Is the physical nature of inventory not what buyers are looking for? Is it the condition of homes?”   Joyce stated that there was not a lot in good shape in certain price points.  Much is a total gut job. Buyers want what they want, and many don’t see the potential in getting a fixer-upper.

Geoff felt that money, time and ability can be a deciding factor.   In addition, as a property owner himself, he knows how hard it can be to get good contractors.  They’re busy, materials are costing more, and prices are coming up.  Both Joyce and Keren said that they’ve seen flippers making mistakes and poor choices that are visible to buyers. Using lower grade materials, not putting finishing touches (outlets without covers, exposed wiring, etc.), they are hurting themselves in their rush to put the house on the market.  The problem is then compounded by listing agents overpricing these homes.

The Luxury Home Market

There has been discussion about possible negative impact of the new tax laws on the luxury, hi-end real estate market.   While too soon to know what the true impact will be,  the luxury market is currently doing better on a year-over-year basis.  Sales  of high-end homes ($500-$750,000) are up in both Orange and Sussex Counties.

The Impact of Tax Reform on the Housing Market

Following the monthly market update,  guest speaker Tom McGlynn of BDO spoke about the impact of tax reform on the Housing Market, as well as in general.   The Tax Cuts and Jobs Act was signed on Dec 22, 2017, the President’s “gift” to the nation.  There wasn’t time to process the impact as changes began Jan 1, 2018.  The Legislation will expire for individuals on Dec 31, 2025.

Tax Rates for 2018

It had been expected that tax rates would be limited to 3 or 4 bands. However, the bands are dramatically expanded.  Furthermore, there is a drop in rates from a high of 39.6% to a high of 37% in 2018, going forward.  The expectation is that people with higher income levels will see a decrease in federal income tax liability.

Major Changes:

Above-the-line deductions:

Moving expense deductions: Only available for US military moving pursuant to military order.  As a result, changes will impact US citizens who move for employment,  whether in the US,  abroad, or to the US.

Alimony:  For Agreements entered into after Dec 31, 2018. the deduction for alimony or separate maintenance payments has been repealed.  Furthermore, inclusion of money received for alimony as income is repealed.  Existing agreements are grandfathered in.

Standard & personal exemptions: Standard deduction increased, almost doubled. Married filing jointly, is now $24,000. More taxpayers may end up claiming the standard as opposed to itemizing. Personal exemption is suspended through 2025.

Medical Expenses. Threshhold lowered to 7.5 percent from 10% for out-of-pocket expenses not covered by insurance.

Real Estate impacted regulations

State and local taxes:   In our market this is the big item.  Taxpayers are now only allowed to deduct a maximum $10,000 aggregate of state and local real property, personal property, and state and local income sales taxes.

Mortgage Interest: Amount of acquisition indebtedness applies to new loans.  However, mortgages in place before 2017 grandfathered in up to $1,000,000 mortgage.  For debt incurred after Dec 15, 2017, you can only deduct interest paid on indebtedness of up to $750,000.   Furthermore, home equity interest deduction has been suspended.

Vikki asked for confirmation that limitations do not apply to real property taxes and personal property taxes paid or accrued in carrying on trade or business? Tom confirmed that this is correct; real estate traders/investors filing Schedule E are not subject to the new limits.  In addition, properties held for investment are not effected by the mortgage limitation.

Changes in other deductions

Charitable contributions: Limitation on deduction for cash contributions increased to 60% of AGI.  However, this cannot be in addition to Standard deduction.  The deduction can only be taken if the taxpayer is itemizing.  It is not known how or if this will affect charitable giving.

Casualty losses: Suspended through 2025, unless loss is attributable to a Federally declared disaster area.

Wagering Transactions: Limited to income offsetting expenses.

Miscellaneous itemized deductions: Suspended through 2025.  Includes unreimbursed business expenses, investment fees, tax prep fees.

Pease limitation suspends limitation on itemized deductions.  For 2018-2025, no limitation on itemizations exceeding standard deduction.

AMT (Alternative Minimum Tax): Put in place to make sure taxpayers weren’t able to reduce their tax liability by utilizing certain itemized deductions (income taxes, real property, state and local taxes) due to income. Congress minimized Corporate AMT.  The individual AMT was expected to be eliminated.  However,  Congress decided to keep it in place but significantly increased exemption amounts and thresholds.

Selling Your Home – Tax Basics Relating to Closing Disclosure Statement

Nothing changes regarding home sale rules if you can show you owned and used home for principal use 2 out of 5 years. Hence, the first $500,000 of gain is exempt from federal and state tax. Basis is the amount home is worth for tax purposes.  This includes what you paid for home, improvements, closing costs, etc.  However, current year deductions may be subject to limitations.

The above are just highlights of the discussions and presentation.  You can watch the entire video here.

 

We Keep You Informed:

The Green Team Shares this information and more each month during our Live Housing Market Update. Register to join the webinar and hear directly from our participating Green Team Sales Associates who share their personal take on how the marketplace is doing.

Industry experts join us each month to share insights into the currently financing environment, as well as broader economic issues affecting the housing market.

Check out our past Housing Market Updates. Then Register to get our Housing Market Updates.

 

Housing Market News May 21, 2018

Orange County Real Estate Market Report for May 2018

Green Team Business Review – May 2018

The numbers tell a story all their own.  Despite the lack of inventory on the market, despite the specter of rising interest rates, loss of deductions due to new tax laws, etc., the Green Team is doing something very right and finding people buyers for their homes and finding homes for buyers!   Both the Warwick and Vernon offices have more than doubled their sales volume from a year ago.

Orange County, NY Real Estate Market Report – April 2018 Results

The May Market Update was held on Tuesday, May 8 on Facebook Live. It was moderated by Geoff Green, Founder of Green Team Home Selling System. Panelists included sales agents Vikki Garby from the Warwick office, Keren Goren of the Vernon office, Michael Giannetto from Residential Home Funding and Ken Ford from Warwick Valley Financial Advisors.

If you missed the original live event, click here to watch.  The discussion involved not only the housing market, but also perspectives on the economy.  Our guest panelists have a great deal of knowledge and expertise, and the conversation was informative, educational and lively.

You can also sign up for monthly updates by email on the Green Team website.

 We were experiencing technical difficulties:

Prior to the update going live, the following discussion took place:

The lack of inventory remains the biggest impediment to home sales, and the panel discussed the various reasons why people are reluctant to sell now.   Vikki Garby stated that there were more buyers this winter than last spring, but that there is not a lot to buy.  Cash buyers were coming in strong, with some people getting full asking price, or over.  Keren Goren stated that many people she spoke to were just hanging on, waiting to see what would happen in the market.

Geoffrey Green told the panel that he is often asked, “Should I wait, because prices are going higher?”   According to Vikki, sellers are worried about finding a home!  People move up here from other places and swamp the market, and people who want to sell but stay in the area are concerned.  Keren said that houses in Sussex are outdated, older than what buyers are looking for.  Geoff said, “At the end of the day, if you’re moving and need to sell, try to sell and buy at the same time.”

The conversation turned to “fixer-uppers.”  Geoff felt that most buyers don’t have the time, experience, and money to do renovation after buying a home.  However, he asked the panel if they were seeing more buyers willing to take on a fixer-upper.

Keren cited a buyer who was willing to take out a loan to put a new roof on a house where everything else had been done. He was willing to go that step.   Vikki stated there was not much to choose from and buyers trying to get into the area are having to be more flexible. Mike Giannetto stated that reno loans are now a big product and many people are taking the opportunity to fix up a house, put in new appliances, roof, etc., using equity.

Watch the video for more discussion, including a fascinating look into the world of economics and how the bond market impacts the interest rate that buyers may soon be paying.

Orange County, NY Real Estate Market Report – April 2018 Results

We are pleased to share with you the Housing Market Report for April 2018.  We break down local real estate activities and provide you with stats, graphs, and analysis of our local and regional real estate market.   In addition, we provide insight from some of the people most familiar with market trends:  sales associates, mortgage funding specialists and financial advisers.

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.

With numbers in for April, the average days on are the lowest they’ve been for this month for 5 years.

 Average Price

 Here again we’re seeing a trend.  Prices are coming in at their highest point for April in 5 years, at an average of $247,849.

 Average Sold to Asked Ratio

This is the percentage a house sold for under or over the last asking (not the original) price.

 The higher the percentage, the hotter the market.  This April the percentage dipped slightly below April 2016 and 2017, but sellers are still negotiating at approximately 3.5 points off the last asking price.  As mentioned last month, this is an average of all of Orange County, with some areas having a higher percentage, and some a lower one.

 Homes that sold at 100% or more of last asking price

 Here again there was a slight dip below April 2016 and 2017, though the numbers remain higher than 2014 and 2015.

 Units Sold

 Units sold seems to have flat lined; however, more units were sold in April 2018 than in the four preceding years.


We Keep You Informed:

The Green Team Shares this information and more each month during our Live Housing Market Update. Register to join the webinar and hear directly from our participating Green Team Sales Associates who share their personal take on how the marketplace is doing.
Each month we are also joined by industry experts who share insights into the current financing environment as well as broader economic issues affecting the housing market.

Check out our past Housing Market Updates. Then Register to join our next one on June 12th at 9am.

[embedyt] https://www.youtube.com/embed?listType=playlist&list=PL6MEM7EpyL0E5YdU249T_KsDQTukboj8E&v=AQYblgrxmIY[/embedyt]

 

Housing Market News May 3, 2018

Orange County Real Estate Market Report for April 2018

 

Green Team Business Review – April 2018

There has been a lot of excitement at the Green Team lately.  Much of it was generated by the Launch Competition, which was a tremendous success this year.  You can read about this annual contest, its goals, the winners and the prizes here.  Then Lucyann Tinnirello was selected as the new Broker Manager of the Warwick office.  In addition, Nancy Sardo was named the recipient of the First Quarter Sales Leader Award in Warwick.

Making Market Updates More Informative and More Accessible

While it seems that would be enough to report, there’s more.  The Green Team strives to bring its agents and its clients up-to-date market information as well as insight into the mortgage market,  events that impact interest rates, and more.  To provide all this information in an expanded,  far-reaching format, the Green Team is going Live on Facebook.

Orange County, NY Real Estate Market Report – March 2018 Results

We are pleased to share with you the Housing Market Report for March 2018. We break down local real estate activities and provide you with stats, graphs, and analysis of our local and regional real estate market. The April Market Update was held Tuesday, April 17 on Facebook Live.  It was moderated by Geoff Green, the Broker/Manager of Green Team Home Selling System. Panelists included sales agents Vikki Garby and Jacqueline Kraszewski.   In addition, Jeremy Miller of First Home Bank provided insights on mortgage and housing industry stats.   Dan Habib, of MBS Highway, a firm that provides insight and analytics to industries, discussed where interest rates are headed and the topic of affordability.  Watch the video on our Facebook page to hear what these experts had to share.

Also, you can sign up on the Green Team website to receive a monthly update by email.

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.

We take a snapshot of the past 5 years and see how the current market compares.  The average number of days on the market is the lowest it’s been for March since 2014.  This shows a stronger market for sellers.  However, it’s not the best news for buyers.

Average Price

Prices have not been on the comeback for some time, but last June they started to rise and are now coming out of the gate significantly higher. According to Geoff, inventory continues to be a big problem. He thinks that one of the issues is that some sellers still can’t get out of their homes based on refinancing they did ten years ago.  They just can’t sell until prices rise, and he believes that will be the key to unlocking inventory.

Jacqueline stated there are just not enough houses out there to show.  The average length of time that most people stay in a house is ten years, and ten years ago was when the market really crashed.  Some people are still underwater and either can’t get out, or don’t want to just break even; they’d like to make a profit.

Vikki added that this year some things are helping.  Last year appraisals were hurting the market.  This year they seem to be getting more realistic based on what is actually happening in the market.   There is very little supply for the demand.     Market traffic was higher in February 2018 than it was in May of 2017.  Sellers are feeling their strength and power in this market.  Even banks are seeing the market potential and wanting to get in on the act, raising prices on properties they would have sold at much lower prices in previous markets.  Vikki has experience in real estate investing, flipping homes, etc., so she brings a valuable perspective to the conversation.

Geoff mentioned that some banks are even holding their position in inventory and renting out units, something which is highly unusual.  Banks generally unload inventory. For them to hold and rent is almost unheard of.

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 percentage, the hotter the market. Again, March 2018 is outpacing the last 4 years, with sellers negotiating approximately 3.5 points off their last asking price.  It’s important to remember that this is an average of all Orange County; in some areas the percentage will be higher and in others, lower.

Homes that sold at 100% or more of last asking price

Again, the numbers continue to rise.  March 2018 is the highest it’s been since 2014, with almost 35% of homes going for 100% or more of the last asking price.  In other words, expect bidding wars!

Units Sold

There hasn’t been a dip from the previous year in many years.  However less homes were sold in March than in previous years.  Vikki felt that people closing in March were closing on those deals made in December and January, when inventory was way down.

Jacque stated that the market is hard on people starting out, those buyers in the under $300,000 range. There is not much available at that price point, and if there is something, it’s usually a total handyman special, which people don’t want!

Geoff agreed that currently, couples are usually both employed and don’t have the time, expertise or inclination to start making repairs and remodels to the home they purchase.  They would rather pay top dollar for a move-in-ready home.  His advice for sellers: spend time renovating your home before putting in on the market.  Bathrooms, kitchens, windows all need to be in good shape.  Paint, new siding, fixing up the landscaping, and replacing the roof if necessary, will bring a good return on your investment.  Buyers are willing to pay top dollar!

Next Market Update

Mark your calendars and join us on Tuesday, May 8 at 9:15 a.m. for our next Facebook Live Market Update.  Our special guests will be Michael Giannetto of Residential Home Financing, who will be offering substantive updates on the mortgage market and Ken Ford of Warwick Valley Financial Advisors, who will discuss other economic factors impacting the housing market.  If you can’t make it at 9:15, be sure to watch it later!

 

 

 

 

 

 

 

Housing Market News March 30, 2018

Orange County Real Estate Market Report for March 2018

Green Team Business Review – March 2018

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.

 

 

 

Buying a homeHousing Market NewsSelling a Home February 11, 2018

Green Team Business Review – February 2018

 

The 2018 Scoreboard:

Green Team’s Warwick office had a very good start to the year.  January was up over all previous years, a very positive sign.  The total sales volume was $5+ million for the month, over $1 million more than last year.  It’s too soon to start comparing agents’ individual numbers.  However, there is a lot of enthusiasm among the team. The market continues to grow and the feeling is that the Green Team will outpace market growth.   The 2018 goal for the Warwick office is $80 million in total sales volume.  With this strong January start, we’ll see if the rest of the year follows suit.

The Vernon office had an increase of almost 60% over last year’s January sales. The sales team is growing, and the hope is that with even more key agents joining the highly motivated and talented New Jersey team, sales will increase.  The 2018 goal is $32,000,000, but a year-end total of $40,000,000 seems possible.