The April 2019 Housing Market Update was held on Facebook Live Tuesday, April 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 updates at GreenTeamRealty.com/HMU.
Geoff Green, President of Green Team Realty, began the update with some national statistics. Discussions have been going on for months as to what the 2019 would look like. And, for the most part, it’s roaring. At least that is the case in our area, the northeast.
National Housing Market Statistics
Total Existing Home Sales
This chart shows the total existing home sales for every two months, year over year. There was a dip, with things trending down, from the end of 2017 through 2018 nationally. But there is a bump at the beginning of 2019. And it seems to be busy for everyone right now. The thinking is that this may be another banner year.
Median Price of Existing Home Sales
Prices have very consistently increased over the last 3 to 4 years. And there doesn’t seem to be a reason to anticipate any change in that trajectory any time soon.
Existing Home Prices by Region
Breaking down existing home prices in terms of regions, this shows where we are now versus last year. The Midwest is leading home prices increases, followed by the Northeast.
% Change in Sales
As prices have risen, there are fewer homes across the nation in the $0-$100,000 range. This low inventory has resulted in the change in sales for that price range. However, it is also interesting that on the very high end, transactions of $1 Million+ have faltered and slowed down. When you start to get into those metro areas where $1+ Million is not unusual, people may be starting to find it’s a little out of reach.
Housing Supply at the National Level
The lack of inventory has been seen as a reason for why the number of transactions was softening for the last 12, 14 months; The supply level peaked in 2018 and then came down towards the end of 2018. But it now looks like it may be coming up again. We really need this to happen to keep the transactions going.
Projected Home Price Appreciation
A panel of over 100 economists, real estate experts and investment and market strategists were interviewed for the most recent Home Price Expectations Survey. These experts have raised the projections they made in the 4th quarter of 2018 for 2019 and 2020. They are anticipating a better year than they first thought.
Mortgage Rate Projections
Despite a zooming market and a very solid economy, rates in Geoff’s view are still remaining low. Someone who was looking for a home a year and a half ago may now see rates up a point and think that they are now “high.” However, Geoff says that rates are still historically low.
Local Housing Market Update
Orange County, NY – Units Sold
We seem to be holding even compared to last year. Perhaps a tick better. This is good news.
Orange County, NY – Average Sales Price
So far this year we’re basically even with last year.
Orange County, NY – Ask to Sold Ratio
Ratio at which a home sells versus the last asking price. The ratio seems to be trending higher which means that demand is still very high. People are willing to pay at or near asking, if not over asking. Bidding wars are still continuing.
Orange County, NY – Days on Market
The days on market continue to drop consistently. Homes are still selling fast, selling quicker each year. All signs point to a continued Seller’s Market.
Sussex County, NJ – Units Sold
Units sold in January and February were lower than in 2018. However, in March the number rose, coming in a tick higher than March 2018.
Sussex County, NJ – Average Price
Sales prices in Sussex have been a bit of a conundrum. Price hasn’t taken hold and there has been a significant one month drop from February to March. This will be an interesting analytic to watch as the year goes on.
Sussex County, NJ – Ask to Sold Ratio
Again, the higher the number, the closer things are selling towards the asking price and the less sellers are having to negotiate off those prices. We’re looking at some very strong numbers here.
Sussex County, NJ – Days on Market
Again, here the lower the number the stronger the market. Here was have a steady pattern of fewer days on the market. Homes are selling faster and faster.
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Meet the Panel
aura Moritz has been with Classic Mortgage for 18 years.
Geoff Green began the panel discussion by asking about the trends they’ve been seeing in the Housing Market Updates and in the market itself. Geoff recalled that the numbers were softening during 2018. Therefore, there was a lot of uncertainty about how the market would be in 2019. However, the numbers seem to be indicating a very good year.
He asked Vikki and Keren what their experiences were in the field. Vikki said that the general market conditions she sees in Orange County, specifically the Warwick, Goshen, Middletown area, indicate a really strong market. There is still a shortage of inventory, which feeds the demand. She has received several new buyers recently coming from outside the area. Plus, many sellers are staying in the area, adding to the number of prospective buyers.
She has noticed more For Sale by Owner signs lately, and has had buyers request to see some of those. Vikki noted that that’s fine; she’s able to show her clients the homes and guide them through the home purchasing process. She then asked if Keren was seeing the same thing in Sussex County and if it’s a new trend. Keren said they are seeing the same thing in New Jersey. With today’s technology, some sellers are thinking they can do it on their own. And as Vikki mentioned, there are no issues approaching a FSBO and arranging a showing for their buyers.
In regard to home prices plummeting in Sussex, Keren said a new wave of REO’s has been released. This hasn’t happened in a while. They’re also being more logical in their pricing. That may be why we’re seeing that drop. In addition, there is that same problem of inventory. Recently Keren had buyer request to see a newly listed home over the weekend. However that home had an accepted offer on it before her clients could see it 4 days later. It’s still a seller’s market.
Geoff agreed that there is clearly an inventory shortage. There is real, organic growth in the market. There are many people who can afford a home, and qualify. Yet there are more prospective buyers like this out there than there are suitable homes. In Warwick, in particular, there is a lot of new construction going on. He wondered if around our local counties there is enough new construction yet. He asked what the panelists were seeing. Had they noticed new subdivisions offering more options for their buyers?
Keren said in Sussex, there was Crystal Springs. A large halted construction site there had just been bought up, and there is new things going up. And there are a lot of people interested in them because there is not that much construction around. They also have those houses that have burnt down and had to be totally gutted. Those houses are getting a lot of activity as well.
Vikki is seeing a lot of new construction in the Warwick area specifically, and also in Goshen, Cornwall. She feels it’s a result of the lack of inventory. Geoff noted that he reads a lot of articles from economists, etc. He received an email from a loan company which urged homeowners to become more reasonable in their pricing. There has also been a lot of talk by economists about the importance of municipalities needing to loosen up their zoning requirements and do what they can to speed up municipalities.
Geoff’s response to these? “Welcome to my world!” Planning boards have gotten tighter and tighter and people are concerned about their communities growing too fast. Regulations have gotten tighter, rather than loosening up. And while Geoff doesn’t believe these things are bad, he’s just saying it’s harder to develop in today’s day and age than it was 50, 60 years ago. There’s just a lot more red tape involved.
Geoff said it will be really interesting to see. America is the place to be. Globally, our economy is far outpacing any other country out there. We’re the “shining city on the hill” again and many people want to be here. Also, many people just don’t want to move.
What’s happening with mortgage financing?
Geoff then asked Laura Moritz where we are with mortgages and where she see rates going, Further, he noted there seems there is a lot of loan of money available, and a lot of loan programs. He doesn’t think that’s the problem. Laura responded that she really doesn’t see a problem at all as far as qualified buyers getting financing. Even a few mortgages were done this month for people with credit scores in the 500’s. Underwriting guidelines have really loosened up. Borrowers may also have what’s called in banking compensating factors = their credit is not so great, but they have other factors, Laura is really not seeing any rejections. She also is not seeing houses not appraising for value. The market has been very steady.
Interest rates are very low now. She has locked in and closed some 30 year loans recently at 4-1/4% with 20% down and good credit. With 15 year loans , you’re looking at high 3’s%.
Geoff mentioned that we’ve talked about the appraisal situation often on the housing market updates. He said it was maybe a year or more that it wasn’t so certain that things would appraise and it was difficult. Now that we have in this steadily increasing medium price market appraisers can buy into the fact that this house is worth more than the one down the street because it’s selling six months later and it’s an increasing market. Where it’s hard on appraisers is on the turn, when the market is on its way up or on its way down.
Laura added that some high end properties with “fluff” amenities may not translate to an appraisal. However, ever her high-end appraisals have been coming in on point because they have the comps.
She doesn’t believe that rates will move in either direction very much over the next 6 to 9 months. However, as we know, one catastrophic event or something in the global economy can shift the bond market and it can change on a dime. It does look like rates will hold steady over the summer months.
Laura closed the discussion by noting that it’s a great time to buy a house. She’s seeing a lot of young people and couples trending towards buying a home before getting married in order to skip the renting stage. She loves hearing from them a few years later that they appreciated $70,000 gain and can now buy their forever home. It’s a great time to buy a home in the Northeast. Geoff added that even speaking to average price we’re still really not back to 2006 levels. As much as it’s a seller’s market now, there is still lots of room for growth in price appreciation in our local markets.
May Housing Market Update
The next Housing Market Update will be held on May 21 at 2 p.m. You can stay informed and sign up for Housing Market Updates. Just click here.
Green Team Realty’s March 2019 Housing Market Update was presented live on Facebook Tuesday, March 19 at 2 p.m. If you were unable to view the webinar live, you can watch at your convenience by clicking here. Sign up for future updates here.
Geoff Green, President of Green Team Realty, gave a breakdown of both national and local statistics:
This is a 3-year comparison, 2017-2019. The later the year, the darker the color. January shows a decline in 2018 and 2019. In August, things started to turn in year over year increases.
The Northeast is still chugging along, though usually the northeast market lags. However, on the whole, pending home sales are down, region by region.
As far as pricing goes, this is a composite of the top 20 cities in the US. Over the last 10 months and pricing is steadily decreasing. However, it’s more of a soft landing. There is nothing indicative of a “crash.” Historical norms are around 3.6% and we’re around that mark, with 4.2%.
On the mortgage side, here is an average of four entities making projections of where rates will be in 2019. They are projecting that rates will continue to increase, below 5%. Geoff feels this is historically a very low rate. While some in the mortgage industry are projecting a decline in refinancing, money for the resale and construction markets seem to be in good shape.
Orange County, New York
In the year over year comparisons, we’re at or below the last few years, but still hanging in there. However, we’re not in an increasing market.
Last year we were in the red all year long. While the stats show year over year increases, this was not our highest February.
The asked to sold ratio, the last asking price versus what homes are selling for, took a dip in February but it’s easy to see that year over year we continue to see an increase.
Days in market still indicate a hot market, being lower than any of the previous years shown.
Sussex County, New Jersey
Units sold are down, below 2017 levels.
Average price, however, is increasing. We may actually be seeing further increases in price in Sussex, something we didn’t see much of last year.
Numbers here are similar to those we saw in Orange County, around 96 to 97%.
The numbers indicate this is still a hot market.
Pinellas County, FL
This month we’re also taking a look at the local market in Pinellas County, Florida.
Year over year stats for January 2019 over 2018 show a wide variation. While the number of closed sales decreased by 13%, prices increased by that same percentage.
ARE SENIOR HOUSEHOLDS REALLY CAUSING HOUSING SHORTAGE?
Ali Chamois of Homestead Funding Corp. shared this information with Geoff about the impact of people aging in place. Prior to the Good Times Cohort (those born between 1931 and 1941), people moved out of their houses at a much faster rate.
Exhibit 2 breaks down the number of housing units by age group and shows that 115,200 housing units would have been supplied to the market by respondents aged 68 to 75; 379,200 by respondents aged 76 to 80; and 601,500 by respondents aged 81 to 85.
A similar calculation for the War Babies and Baby Boomers estimate that an additional 550,000 homes were held off the market by these cohorts by 2018, as shown in Exhibit 3.
In total, it’s estimated that there were around 1.6 million housing units held off the market by those three cohorts as of 2018. This amounts to 2.1 percent of total owner-occupied housing units in the United States as of 2018.
Meet this month’s panelists:
Geoff Green, President of Green Team Realty, is our moderator. Laura Marie of Keller Williams, St. Petersburg, Florida joined the panel as a special guest. Keren Gonen of Green Team New Jersey Realty, Vikki Garby of Green Team New York Realty and Ali Chamois, Homestead Funding.Corp.who joined the conversation by phone, rounded up the panel.
Geoff opened the discussion by introducing Keren Gonen, who has been a panelist every month. Her feeling has been it’s going to be a strong market in 2019, but that the inventory shortage is still happening; not as many foreclosures, etc. Geoff asked if she is still in this same mindset? Keren replied “Absolutely!” Properties are not being released by banks, who are flipping them themselves. Housing shortage has more to do with number of units going down than buyer demand. Sellers are still sitting on houses, waiting to see how strong the spring market will be.
Vikki Garby joined the conversation, saying much is the same in Orange County. Inventory problem is still out there. Buyers are out there. Properties in good condition, priced right, are going quickly. Investors, experienced flippers and new flippers, are trying to find properties. More REO’s are hitting the market and are going quickly, the ones not being done by the banks. Flippers are out and scooping them out.
Laura Marie saw many similarities with Pinellas County, FL. There were 11 short sales and 31 REOs total for Jan. Ones being sold are not much under market. Still hardcore investors are looking for the right deal. The margins have shrunk… To get ahead of the market you have to get off market. A huge amount of fixer uppers. Investors not wanting to purchase some of these homes because of cost of materials, etc. Pinellas County was developed between 1920 and 1960. Buyers are looking for updated, polished, shiny homes.
Geoff asked Ali if she agreed with the projections for the average 30 year fixed mortgage. Ali brought up that for Fannie Mae and Freddie Mac, rates are based on downpayment and credit scores. These factors impact the rate. Regarding projections, clients ask whether they should lock in rates or hold off… Ali never advises them on that because forecasts and predictions can change due to a variety of causes. Geoff said that Freddie Mac is much tougher now, which may be holding the market steady. There is not a lot of subprime lending. Because not a lot of defaults are happening, credit isn’t tightening up. Ali sees a little loosening up on credit standards.
Regarding Aging in Place, Geoff sees this happening within his own family. Ali stated that overall health is better, support systems are better. People don’t want to leave their homes. The current trend is to provide outpatient services for health care. Per Keren, people are living a lot longer. It seems that we do need more houses. There are also people moving in with other generations.
Parents, adult children and grandchildren, living as extended families. The US is transforming. Laura seeing the same thing in Florida. Downsizing, 55+ communities also allow people to have independence – but less yard care. Vikki said that we have more 2 income families. Grandparents often help with childcare instead of relocating, then kids are taking care of the parents as they age.
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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 home ownership 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 home ownership is a good thing.
January 2019 Local Housing Market Update for Orange and Sussex Counties
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.
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%.
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.
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 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.
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.
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.
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 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.