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April 2021 Housing Market Update
Green Team Realty’s April 2021 Housing Market Update was held on Tuesday; April 20 at 12 p.m. Geoff Green, President of Green Team Realty, welcomed viewers.
If you missed the webinar or would like to view it again, it is available here:
Snapshot of Year-over-Year Changes in Key Metrics
- Showings are up 49%
- Purchase applications, up 39%
- Pending deals, down 0.5%
- Existing homes sales, up 9.1%
- New Home Sales, up 8.2%
- Existing inventory is down 52%
- New Home inventory down 4.6%
Inventory at historic lows?
What else are we talking about in our April 2021 Housing Market Update?
Housing Market Stats – National and local levels
“Housekeeping” Items
Hear from our Panelists
Geoff was joined by panelists Tammy Scotto of Green Team New York Realty, and Kristi Anderson of Green Team New Jersey Realty. In addition, Laura Moritz of Classic Mortgage was there to share her expertise as a mortgage specialist.
To hear the panel discussion, click here for the webinar.
We’ll see you on Tuesday, May 18 at 12 p.m. Sign up for Housing Market Updates at:
HMupdate.com
September 2020 Housing Market Update
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[et_pb_column type=”4_4″][et_pb_text admin_label=”Text”]Geoff Green, President of Green Team Realty, welcomed everyone to the September 2020 Housing Market Update. The webinar, held on Tuesday, September 15 at 2 p.m., examined the housing market on both national and local levels. Discussion included the impact of various economic factors resulting from the COVID-19 pandemic.
If you missed the webinar or would like to view it again, it is available here.
Meet the Panel
September Housing Market Update panelists were Kristi Anderson and Keren Gonen of Green Team New Jersey Realty. They shared their knowledge and expertise in the Vernon and Sussex County, New Jersey markets. Carol Buchanan, Green Team New York Realty, shared her experiences with the Warwick, Orange County, New York markets. In addition, our guest panelist was Michael Giannetto of Cross Country Mortgage. Michael shared his expertise on the
First, here are some stats on the national and local markets, presented by Geoff.
We’re Up, Up, and Away
July marked ten straight months of year-over-year gains in price. In addition, we have first time ever, national median home prices breaching the $300,000 level. With the easing of lock-down regulations, showing traffic is now way up, year over year. Mortgage applications, year-over-year, are also popping. Realtor.com’s chief economist says that inventory is down 38%.
Demand is way up, supply is way down
Builder confidence is also growing. It tied its highest reading in NAHB/Wells Fargo Housing Market index’s 35-year history. However, lumber prices have more than doubled since mid-April. The pricing of lumber should come back down, based on supply issues as opposed to supply and demand.
Housing affordability
The housing market is about affordability as opposed to just pricing. While prices continue to go up, mortgage rates have been going down. Thus, lower mortgage rates make buying a home more affordable.
Learn more, watch the webinar
Watch Geoff’s full presentation on national and local economic and real estate trends. In addition, hear our expert panel discuss their experiences in this market. Click here to view the webinar.
Furthermore, compare prior stats. Click here for the July 2020 Housing Market Update.
“Housekeeping” Items
Contact our Panelists
Join us on Tuesday, October 20 at 2 p.m.
Sign up for updates now at GreenTeamRealty.com/HMU
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June 2020 Housing Market Update
Green Team Realty’s June 2020 Housing Market Update addresses the economic impact of COVID-19 on the real estate market. However, we know that many individuals, families, and businesses have been personally impacted by the pandemic. To all those diagnosed with COVID-19, or who have loved ones with the virus, we wish you a fast, full recovery. To all who have lost someone to COVID-19, our thoughts and prayers are with you. And, while there are a lot of positives to report this month, we realize that many are suffering financial hardships, stress, and anxiety. These are very difficult times, but to quote Geoff Green,
Together we will persevere!
Geoff Green, President of Green Team Realty, welcomed everyone to the June 2020 Housing Market Update. The webinar was held on Tuesday, June 16 at 2 p.m. Geoff shares both national and local stats. Furthermore, he checks in with those who have “boots on the ground.” Sales Associates from Green Team New York Realty and Green Team New Jersey Realty share what’s happening in their respective states and communities. There are different regulations for the real estate industry in New York and New Jersey. Thus, there are differing impacts on what is happening in each state. In addition, our guest panelist shares information on the current mortgage market.
If you missed the webinar or would like to view it again, it’s available here:
Meet the “Power Panel”
The June 2020 Housing Market Update panel shared their observations, experiences, and expertise in this Covid-19 market. Keren Gonen and Pam Zachowski with Green Team New Jersey Realty talked about Vernon and the Sussex County NJ market. Carol Buchanan, with Green Team New York Realty, discussed Warwick and the Orange County NY market. Laura Moritz, Director of Sales, Northeast Region at Classic Mortgage LLC shared her experiences with financing and refinancing in a Covid-19 market. Watch the above video to hear what the experts had to say.
Let’s start with the jobs market and overall economy
To see where we were last month, click here for the May 2020 Housing Market Update.
According to CNBC,
The May gain was by far the biggest one-month jobs surge in US history since 1939.
Over 75% of job losses were temporary layoffs or furloughs. The Federal Reserve Bank’s May report indicated there were news reports of large-scale hiring at companies like Amazon, Walmart, CVS Healthcare, Domino’s Pizza, etc., due to increased demand.
The Wall Street Journal reported:
Employers added 2.5 million jobs, blowing Wall Street expectations out of the water. Economists had forecast a loss of 8.3 million jobs.
And on to the housing market
According to Ivy Zelman, CEO of Zelman & Associates,
Housing will fare better than expected during this severe downturn.
Home prices are expected to continue to appreciate through 2022, according to several respected industry experts.
Mortgage Demand
According to Diana Olick of CNBC,
Mortgage demand from home buyers shows unexpectedy strong and quick recovery… The quick recovery has surprised most forecasters.
Pending sales and new listings are up from the previous month, according to Zillow’s June report. People are becoming more confident in putting their homes on the market than they were in the early days of the pandemic. Foot traffic was practically non-existent.
The percentage of distressed property sales is at a very low number. The projection is that it will continue to decrease, from 4% to 3%. What lead the last downturn in 2008 was that there were so many distressed properties. Another interesting fact is that most American’s choose real estate as the best long-term investment, over stocks, savings accounts, and gold. This is another sign that confidence in real estate is high.
Mortgage rates
Freddie Mac’s projections through 2021 indicate that rates will remain low. The availability of money drives pricing. Despite all the turbulence we’ve been experiencing, things are looking good in the real estate market.
National and Local Stats on Units Sold & Average Sales Price
On the national level, there was a big drop off in units sold in April, compared to the last four years. (National stats lag 30 days behind. We’ll have May stats in the July Housing Market Update). Geoff fully expects the numbers to rise in June, July, and August, perhaps even surpassing previous years’ numbers. Home prices continue to increase, despite the decrease in traffic, a result of supply and demand. There are simply not enough homes available for sale for all the people who want to buy them. Months of inventory is showing an uptick, though we’re still far below having the 6 months of inventory that would indicate a normal market. We are in a seller’s market, with lots of bidding wars and lots of homes selling above asking price.
In Orange County, New York, we have a bounce-back on units sold from April to May. The average sales price is staying level, but at a high level compared to previous years. Supply and demand should keep sales price high. In Sussex County, New Jersey, units sold have been on an upward trend and never really came down. Average price is still up over the past four years.
“Housekeeping” Details:
To reach any of the June 2020 Housing Market Update panelists,
March 2020 Housing Market Update
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Note
Things are happening rapidly. Just three days after the March 2020 Housing Market Update on the 17th, everything changed. On March 20 Governor Cuomo issued the New York State on PAUSE Executive Order. One day later, Governor Murphy announced a Statewide Stay at Home Order for New Jersey. And even though our physical offices are closed, Green Team Realty sales associates and support staff are all working remotely.
March 2020 Housing Market Update
Geoff Green, President of Green Team Realty, welcomed everyone to the webinar. He began by discussing last month’s Housing Market Update. One month ago on the February 2020 HMU, things were looking great. The stock market was nearing all-time highs. One month later the coronavirus had set in. Now everything is different.
We are in historical times now. And the panel will try to break it apart and make some sense of what’s happening. The panel includes a mortgage expert and financial expert, in addition to sales associates from Green Team New Jersey Realty and Green Team New York Realty.
Silver Linings
Mortgage rates are extremely low and there are lots of good programs that help people buy a home. Looking at rates from 2016 to today, they are now historically low. Things are fluid now. The Central Bank is in flux, determining 10 year treasure rate. There is a correlation between the treasury rates and 30 year mortgage rates, but they are not one and the same. Laura Moritz, the panel’s mortgage professional, reiterated that. The treasury rates that you hear about on the news do not translate to mortgage rates. Reach out to your mortgage professional to find out what the rates are for your current financial situation.
Some Other Positives
According to ShowingTime, at the start of the year there was a 20.2% increase in showings. 2020 was off to a great start. Geoff sees this as a positive. After we get through this tough period of time these numbers should bode well.
A Mixed Bag
Crude prices present a mixed bag. We are experiencing the single largest decline in the history of crude oil prices. This is due to an oil-price clash between Saudi Arabia and Russia. On the positive side, we’re potentially paying less at the pump and to heat our homes. On the negative side, those companies involved in the oil industry stand a chance of going out of business, defaulting and impacting banks that financed their operations. Without banks lending money, the housing market cannot move forward.
The Coronavirus and the Real Estate Market
The CDC and the White House, during their press briefing, seemed to indicate that this would not be over anytime soon. A lot of school districts, local business leaders, politicians may be saying “For the next few weeks this is going to happen.” However, Geoff’s sense from the briefing was that this halt of movement will actually be prolonged until this virus is truly contained.
Therefore, we need to find ways to operate responsibly and respectfully, to keep the housing market in check and not experience a complete crash.
Impact on Stock Market
Just a month ago the Dow Industrial Average was wavering between an incredible 29,000 and 30,000. The take-away at that time was that 2020 was going to be a great year, as long as there wasn’t a major global crisis. During the February Housing Market Update, Geoff mentioned that he thought the coronavirus might become that global crisis. Within a few days of that the virus began to quickly spread globally. The day before the March 2020 Housing Market Update, the Dow dropped 3,000, its worst day since 1987. And now, the global economy is at a standstill.
A Commercial Real Estate Bubble?
One thing that not many people are talking about yet is the Commercial Real Estate Bubble. Carl Icahn, a billionaire investor, is betting on the commercial real estate market being in a bubble and about to crumble. That is a big deal as banks are heavily involved in commercial real estate and lending. This is a situation we’ll be keeping an eye on.
Local Housing Market Stats
Orange County
Units sold was lower than preceding years for the month of February, while it had been higher during January. That kind of fluctuation is not uncommon and when averaged out, it’s right in the mix. Sales prices came out way ahead of previous years, much the result of low inventory. Ask to sold ratio is still at a very high percentage. That means sellers on average are only negotiating 3% off their last asking price. Days on market has gone up a little, which generally means a slowing of the market. At this pre-coronavirus stage, there were some indications that the market was slowing a little.
Sussex County
Units sold in Sussex County were a mixed bag. Not quite as high as 2018, but a little higher than 2019. Average price is up, and ask to sold ratio is at 97%, As in Orange County, days on market is going up, again indicating a slowing in the market.
As Real Estate Professionals, what can we do during this crisis?
Whether you’re a home owner, potential buyer or realtor, we all need to take this seriously. Geoff mentioned that one of the doctors on the coronavirus news briefing on March 16 said that this is all about the Greatest Generation. Many of the people who are dying from the coronavirus are from the World War II generation. And we owe it to them to try to safeguard their health. We have to make sure we’re doing the right thing.
We have to make sure we’re watching the WHO and CDC guidelines and operating within those confines. Some countries are shutting down, others are not. Geoff’s take away is no more group meetings. If you are having symptoms, then you and your household must self-quarantine. If you’re a real estate agent and you have symptoms, take it seriously. Do not show homes, do not pretend you’re asymptomatic.
For those sales agents who do not have symptoms and have not been exposed to the virus, Geoff recommended the following. Tell sellers who might be concerned about buyers coming into their homes that we will do personal showings and greet the potential buyer and buyer’s agent at the door. Make judgment call if you think they might be ill. Walk them through the home, opening doors, closets, etc., then wipe them down before leaving.
Video tours provide a good alternative, if necessary. Buyers are never physically in the property. The sales associate, with boots on the ground, walks them through, using video conferencing.
Before opening the discussion up to the panel, Geoff had one more thing to say… WE WILL PREVAIL!
Housekeeping items
Meet our Panel
From left to right, Laura Moritz, Clasic Mortgage; Ken Ford, Warwick Valley Financial Advisors
From left to right, Kristi Anderson, Green Team New Jersey Realty, Keren Gonen, Green Team New Jersey Realty, Angela Murphy, Green Team New York Realty
Discussion
Looking for “boots on the ground,” Geoff first asked the sales associates what was happening with ShowingTime. Were people continuing to want to see homes, were they cancelling? Kristi stated that she was still getting lots of showings on her properties. Personally she showed 8 different prospects homes over the weekend. It’s very busy still at this point. Keren had two cancellations over the weekend, then got calls from a brand new client she showed homes to. And just the day before she showed one client eight properties. Angela agreed that not only are people viewing homes, they’re purchasing homes. Six out of ten homes she had showed to buyers had accepted offers within a week. Kristi added that she had two properties go to contract this day.
Geoff stated it’s interesting that the housing market in total – sales, exchange of real property, renovations, maintenance, etc. roughly equates to almost 20% to 25% of national GDP. It is a major force, economically speaking. His hope is that the housing market will stay relatively healthy during all this. If we do go into recession, it may not be that deep and that bad. He asked Ken for his opinion on this.
Are we heading towards a recession?
Ken first talked about the history of recessions. He said this is the longest period that the US has gone without a recession. The last was 2008/2009, the period of the great financial crisis. And we’ve never gone a decade without one. Going back 150 years of data, we’ve had one or two recessions each decade. Recessions can be healthy, weeding out the excesses of economic expansion. Our economic expansion has been built on more debt, more credit, low interest rates and the Federal Reserve pumping money into the economy. The saying goes, the bigger the boom, the bigger the bust. And the last ten years have been the biggest boom he’s ever seen.
If liquidity and the financial markets seize up like they did in 2008, then we are going to have a recession. The Fed dropped the interest rate to 0%, providing lots of liquidity. They’re trying not to repeat 2008, but Ken is not sure they’ll be able to do it. We don’t have any stimulus that can jump start the economy. Plus we have a trillion dollar deficit, so where do we go from there? If we start losing confidence in the market, there will be a problem. Greed and fear often drive decisions. However, he said if you know how to value assets and have the capital there will be some great investment opportunities going forward. And Ken does believe that we’re headed for a recession, with everything shutting down, people working from home, unable to go to stores, restaurants, etc.. It’s just a question of how bad the recession will be.
From the lender’s perspective
Geoff asked Laura for her thoughts. She reiterated what Geoff had said. We’ve survived bad times before. And, unlike the big cities, a lot of people are looking to move to less densely populated areas. Our proximity and distance from major cities are important factors. From a lender’s perspective, she had four accepted offers the day before. She does see buyers putting offers in, and she had three closings this week. On the other hand, she does see evidence of the banks tightening up. Putting down 3% or 0% may not be feasible. Property values may be depreciating in the short term, larger down payments may be required. People still need a roof over their heads, so it’s different than the commercial market that Geoff described before.
Laura said that she’s been inundated with calls from people wanting to refinance they’re mortgages. She closed ten last month. However, right now banks do not want to refinance mortgages and are pricing them accordingly. They don’t want to compromise their portfolios. If you want to refinance, you may have to hold on. Geoff said that one of the strengths, compared to 2008, is the level of equity in homes, in general. A lot of households don’t have a mortgage, and a lot have a pretty low loan to value ratio. He hopes that the housing market, which caused the 2008 financial collapse, is now carrying the U.S. economy. We’ve been in a boom compared to the rest of the world.
Can a strong housing market make a recession not hurt as much as last one?
Geoff asked if it’s fair to say that the U.S. housing market might actually make this recession not hurt as much as the last time?
Ken replied that he was looking at something that was the best indicator of valuation of residential housing. The Case-Shiller Index shows that with real estate in Warwick, you can’t buy the same house in Greenwich, CT. You can’t buy the same square footage, etc. The denominator is the income of the town you live in; the value of real estate divided by the average income. It is higher than 2007/2008. We have a higher valuation than what they deemed to be a housing bubble.
Geoff believes low mortgage rates and low inventory, providing supply and demand, has driven real estate value up. He believes there is still so much demand, without the supply. Ken said if we wind up with inflation, mortgage rates will go up. Income inequality is a major problem. Interest rates drive the pricing power of all assets.
Impact of the job market
Geoff said it will all boil down to people having jobs and having confidence to buy a home. The job market is another interesting discussion. The number of layoffs that might occur during this halting of movement will be of interest. He hopes that companies will hang on to cash flow to keep their employees on. He said that is what they’re doing at Green Team. Everyone is working remotely, and they haven’t dialed back on staff. They’re trying to do more with what they have and hope other businesses do the same.
Ken said it all comes back to the stock market. The biggest cost of any corporation is the employees. If stock plummets and earnings go down, the CEO or CFO of major corporations will normally cut employees. Decision makers start laying people off when revenue and earnings go down. As financial planner he tells people to have emergency savings, just in case they are laid off from their jobs.
Wrapping it up
Geoff thanked everyone for their participation. The take-away is, if you’re a seller worried about putting your home on the market because of what is going on, for market reasons get your home on the market now. The market is still very robust, as Kristi, Keren and Angela had stated. We don’t know what the future holds, so why wait? If you’re concerned for health reasons, that is understandable. There might be ways around that, as well. He suggested talking to a Green Team realtor, such as Kristi Anderson, Keren Gonen or Angela Murphy. Regardless, this is what realtors do… find ways to make it happen. For buyers, there may be some unique opportunities.
We have no choice but to keep going. Keren added that she listed a house on Saturday and the next day had three full-priced offers. Good houses are selling. Have trust that we can get this done for you.
Laura added, with everyone staying together, being with their families, they’ll re-evaluate priorities. And what is the heart of the family? Their home. Extended families may blend, people will find comfort in their homes. She feels in that regard, this will be good in our market.
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January 2020 Housing Market Update
Geoff Green, President of Green Team Realty, welcomed everyone to the January 2020 Housing Market Update held on Tuesday, January 21 at 2 p.m. This first housing market update of the year provides a review of 2019, as well as a look forward.
Click Here to Watch the recording of the live Housing Market Update
National Stats
Housing Market Predictions for 2020
Influencers in the industry have made predictions as to where the housing market is headed in 2020. Ken Leon, Global Director of Industry and Equity Research of CFRA Research says there is a strong foundation for the housing market driven by employment growth, higher household income and consumer confidence levels. In addition, he also believes that we’ll start to see millennials beginning to acquire their first homes. There are more millennial buyers than any other generation right now.
George Ratiu, Senior Economists of Realtor.com sees a mixed bag. Supply of new homes begins to offset inventory. We’ll still be talking about inventory issues, but interest rates remain reasonable as home prices flatten. We’re not seeing that flattening of home prices in our area at this time, but its reasonable to assume the growth of price appreciation will slow in 2020.
Freddie Mac expects interest rates to remain low for the next two years, a good thing.
The Positives
As shown above, rates are still historically low. It seems like the experts are in agreement that home prices are going to increase, though Realtor.com is the most pessimistic, predicting just a slight increase. Housing starts (new housing analytic) appear to remain at about 1.3 million. And total home sales look like they may eclipse 6 million, indicative of a very strong 2020 housing market.
The hurdles…
The issue of inventory we’ve been dealing with for some time is continuing. And it appears that it will keep on being an issue for at least 2020.
Promising news regarding national delinquency rate
This is encouraging news. What lead to the major downturn in the 2007/2008 housing market and kept it at such a low level till 2016 was delinquency. Right now we are basically at 20 year lows as far as loans defaulting. This is a great analytic as it means people, even when it’s difficult, are keeping up with their mortgage payments. A lot has to do with confidence as homeowners see their homes increase in value.
American Debt
Thought to be a precursor in relation to the housing market; auto debt has doubled in the last 10 years. Even as auto loan debt continues to rise, the percentage of delinquent borrowers is still at a lower than average level and sales remain strong. However, it warrants watching.
Local – Combined Stats for Orange, Rockland and Westchester Counties, NY
Units Sold
Broken down into quarters, it’s evident 2017 was the peak, year over year.It’s worth keeping track of these trends.
Average Price
Prices are continuing to increase, showing an increase over the last four years at end of 4th quarter.
Ask to Sold Ratio
The last asking price versus what the home sold for. This is softening a bit. The higher the number, the better the sellers market is. As it cools, the better the market becomes for buyers.
Days on Market
We’re seeing days on market coming up, an indication that market is cooling.
Orange County, NY
Units Sold
As opposed to quarterly format, these graphs show month-to-month variations. You can see where things started to fall off back in the end of 2017. While it could be argued that we’ve been in a cooling off period for almost 2 years, we haven’t seen price follow suit.
Average Sales Price
We have been seeing price increase over the last two years, in comparison to the units sold trend. Geoff reiterated that in his experience, price always lags units sold. Here we’re looking at a two-year lag, but much can be attributed to low inventory.
Ask to Sold Ratio
Days on Market
Local – Combined Stats for Sussex, Morris and Passaic Counties, NJ
Units Sold
There is a significantly lower variance for 2019 in units sold.
Average Price
Here again, prices are rising, even though units sold is significantly down.
Ask to Sold Ratio
Average sold to list price ratio is slowing down, a sign that things are cooling off a bit. The higher the number, the hotter the market. The lower, the cooler, and trending towards a buyers market.
Days on Market
These numbers are still holding strong.
Sussex County, NJ
Units Sold
Per Geoff, these are really the most important numbers to look at. And again, in 2017 the numbers started to decline.
Average Sales Price
Ask to Sold Ratio
Days on Market
So, should you buy or sell a home in 2020?
If you’re considering buying a home in 2020, it comes down to individual circumstances. The Consumer Financial Protection Bureau recommends a total debt-to-income ratio below 43% to get a qualified mortgage.
Should you sell your home in 2020? Regardless of the advice here, Geoff says if the time is right for you, the answer is yes! If you’re a Baby Boomer and you have a place to go to but are waiting to see if the market is going to go a little bit higher, that may not be a game you should be playing. There are too many variables. Lots of stats show the market is entering a cooling off period. In an election year you never know what the impact will be. In other words, the market is about as good as it’s going to get for the foreseeable future!
Click Here to Watch the recording of the live Housing Market Update
Housekeeping Items
The next Housing Market Update will be on Tuesday, February 18 at 2 p.m You can sign up at GreenTeamRealty.com/HMU.
Thank you to our sponsor, REALLY, The Real Estate Referral Community. REALLY is where Professionals who serve the Real Estate Industry can connect, communicate and securely exchange referrals with speed and ease. And there are no fees on commission exchanged between Agents. Join for free at ReallyHQ.com
Meet Our Panel for the December 2019 Housing Market Update
Our moderator is Geoff Green, President of Green Team Realty. Our panelists are Keren Gonen of Green Team New Jersey Realty.
We also have Carol Buchanan and Wayne Patterson of Green Team New York Realty.
Geoff opened the discussion by asking the panelists how 2020 was starting off for them. What are they experiencing?
Carol Buchanan
Carol began by stating that she has never seen a January this active. She is working with clients who will be listing, buyers who are anxious to purchase. Again, inventory is still low so when a home comes on the market that is nice and priced well, it sells quickly. In January 2019 Carol predicted that 2019 was going to be a strong year. Geoff asked if she has the same sense for 2020. “Absolutely! Positively. No doubt about it,” was Carol’s response. ” 2020 is going to be a very, very strong year in real estate.” Geoff added that Carol’s predictions have proven to be more correct than anyone else’s he knows, so he always listens to hers!
Wayne Patterson
Geoff then asked Wayne, who has been in the industry a long time, what his take-away was on the stats presented. Wayne replied that what immediately came to mind was that if a buyer is interested, and because inventory is so low, they should have all their ducks in a row. It’s vital to be pre-approved, have all documentation ready to go, etc. Buyers have to be ready to move as there will be competition for homes on the market. “He who makes the offer first, wins!” Sellers who have been waiting to put their home on the market? Wayne’s advice is do it now! It’s going to sell quickly because there is an abundance of buyers.
Geoff’s experience in listing homes is that often people say, “Well, we really don’t have to sell it right now. Maybe we should wait another year because the market might come up another 5 or 6%, money that would come in handy for our retirement.” Geoff asked Wayne his response to that line of thinking. Wayne replied that the homeowner is thinking of selling for a reason. They want to retire and move out of state and alleviate a lot of the expenses that go along with maintaining that home. Taxes, maintenance costs, etc. That money that you think you’re saving by not putting your home on the market now will be spent in the upkeep of the house. If you’re thinking of selling in the Spring because you hear that’s the best time, you may have a better chance of selling your home now if it is in good condition and priced well.
Keren Gonen
Keren thinks that 2020 will be even better than 2019 because interest rates have now made it cheaper to buy a house than to rent. It’s been trending this way for awhile, but not everyone has been aware of what’s happening. In Sussex, Keren said, you can rent a home for $1,900, while a mortgage would cost $1,300! As far as Sellers waiting to list their homes, Keren always advises them to watch Green Team’s Housing Market Update so they can see what the truth is. We bring stats in from various sources; it’s not just our opinion. So when people ask if they should wait for Spring, Keren lets them know she is out with buyers everyday, in the snow, in the freezing cold. And you know when someone is looking for a home in those conditions, they are serious buyers.
In addition, we never know what is going to happen in the future. So if you want to sell and move to a warmer climate, now is the time to do it. Geoff stated it’s good to list now as it also puts you ahead of the competition, when most sellers put their homes on the market. Very often buyers have very definite time constraints. They have to purchase a home by a particular time and couldn’t wait till Spring. And when more inventory comes on the market, there is less competition among buyers and more room to negotiate.
A Global Perspective…
Looking at the DOW, the market is very strong. It looks like the first phase of the US/China Trade Deal is a done deal and seems to be favorable to the US. The replacement of NAFTA with the new trade deal has now gotten through our Congress, but that was causing some wariness in the business sector. So some things that had been hanging over the economy in 2019 seem to be resolving. However, we are in the midst of an impeachment process and election, so we’ll be watching for the impact.
To Contact our Panelists:
Carol Buchanan: 845-705-9162 or carolbuchanan97@gmail.com
Wayne Patterson: wayne@waynepatterson.com or 845-313-5623
Keren Gonen: 551-262-4062
We’ll see you on February 18 at 2 p.m.
December 2019 Housing Market Update
[et_pb_section fb_built=”1″ _builder_version=”3.0.47″][et_pb_row _builder_version=”3.0.48″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.0.47″ parallax=”off” parallax_method=”on”][et_pb_text _builder_version=”3.0.74″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”]Geoff Green, President of Green Team Realty, welcomed everyone to the December 2019 Housing Market Update held on Tuesday, December 17 at 2 p.m. He began the webinar with an overview of National Stats.
National Stats
Good News, Economically…
Good news on all economic standpoints, not just real estate! Economists seem to be pushing back the recession timetable. It doesn’t look as though many people think a recession will be happening in 2020. A few people think we might even see another five years before we have another recession. It may be that the answer lies somewhere in between.
Increased Purchasing Power
At the end of the day it comes down to monthly cash flow for people. It is almost irrelevant what the price of a house is. It’s much more relevant what it costs on a monthly basis to live in a house.
While prices have increased, mortgage rates have gone down substantially over the last couple of years, making the ability for people to purchase that much greater.
In 2019 there has been a decline in the payment as a percentage of income, meaning that mortgage payment has gone down in relation to income coming in. Another consideration is wage increases. People are making more money over the last few years due to a strong economy. This has led to a sustained positive housing environment. It is now easier and easier for people to buy homes.
Americans are choosing real estate as safest investment
What are Americans thinking about home ownership? People perceive home ownership in a positive light with many benefits. Not just financially, but also in terms of family, stability, community, etc. People are thinking it’s even safer to invest in a home than in a savings account.
Rental rates are out of control!
Rent rates have been out of control. Geoff is an owner of apartment units and it has been very steady. And he finds it remarkable how people will sometimes stay in place and not buy a home. People should jump into home ownership and engage, as there are so many benefits to it. Rent values are increasing, not decreasing.
Orange County, NY
Units Sold
It’s been a mixed bag this year – up some months, down some months. We were up again in November over the past 5 years.. When we have our Housing Market Update in January we’ll be able to look back and review 2019 in its entirety. Geoff has no reason to anticipate any substantial surprises for December.
Average Sales Price
With the exception of March and August, it’s been up consistently. And there is no reason to believe that the rate of appreciation shouldn’t continue to increase modestly throughout 2020.
Ask to Sold Ratio
Ask to sold ratio is the ratio between the last asking price and the sold price of a home. It is at a very high ratio. It’s was less than 2% in July, historically a very high number. And even though November dipped down to about 96-1/2%, it’s still a very good number. We are really talking about historical strength here. Even though there are some ups and downs, historically these are very good numbers.
Days on Market
Days on market continues to be low, but it’s ticking up a little now. According to the graph, the lines are converging a little in July and September and it appears to have crossed over in October and. This means that the market is cooling a little, but that’s to be expected.
Sussex County, NJ
Units Sold
Still a bit of mixed bag, but not any month was the highest of the last 3 years. In November we dropped below the last 3 years. While not what we want to see, but it is what it is.
Average Sales Price
Average price is still pretty strong. It took awhile for Sussex County to come around in price appreciation. However, prices seem to be increasing at good level.
Ask to Sold Ratio
Again, the ratio between the last asking price and the sold price of a home. While not as strong as in Orange County, still very strong historical numbers.
Days on Market
Sussex is showing a strong market. Again, in November there was crossover, indicating a slight cooling of the market.
Housekeeping Items
The next Housing Market Update will be on Tuesday, January 21 at 2 p.m You can sign up at GreenTeamRealty.com/HMU.
Thank you to our sponsor, REALLY, The Real Estate Referral Community. REALLY is where Professionals who serve the Real Estate Industry can connect, communicate and securely exchange referrals with speed and ease. And there are no fees on commission exchanged between Agents. Join for free at ReallyHQ.com
Meet Our Panel for the December 2019 Housing Market Update
Our moderator is Geoff Green, President of Green Team Realty. Our panelist is Keren Gonen of Green Team New Jersey Realty
Keren has been a consistent panel member, present at each update. Geoff remarked that they’ve been doing this all year long, and it’s been a year of trying to figure out where the market is heading. Yes, it has slowed down, but it’s been a soft landing. It’s been a strong year altogether.
Keren remarked that one of the reasons there were fewer units sold in Sussex County is that there were fewer units listed. Many sellers are deciding to hold on to their houses, on the fence about whether to sell. They want to see what the new year brings, even though their agents are telling them that this is the time to sell. Otherwise they’ll be releasing their property when everyone else is. However, they’re still holding tight.
The other thing she’s noticed is listing prices that are way too high. For example, a house that should have been listed at $200,000 being listed at $250,000 .At that price it just doesn’t make sense and won’t sell. However, the sellers are still holding on. Geoff agreed that there are always overpriced listings. It’s a human condition in any market place. There may be a higher percentage right now. Often people try to hold out for that higher price. He also agreed that lack of inventory is the biggest problem.
Geoff said that the sum total of circumstances hasn’t allowed for rapid increase so maybe there will be a longer sustained recover and rebound to the housing market. Keren is working with sellers who will be listing during the first quarter of the year.
Keren’s parting words of advice:
List your houses now, because we don’t know what will happen!
Geoff agreed that right after the New Year is a great time to get going. It has been a wonderful holiday season with many transactions taking place.
You can contact Keren Gonen at 551-262-4062
By the way, Keren took part in this update from the airport, on her way to a two-week trip to Israel!
We’ll see you on January 21st at 2 p.m.
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November 2019 Housing Market Update
Geoff Green, President of Green Team Realty, welcomed everyone to the November 2019 Housing Market Update held on Tuesday, November 19 at 2 p.m. He began the webinar with an overview of National Stats.
National Stats
Total Home Sales
Geoff is looking for the bump locally because nationally it looks like on a year over year basis there was a bounce. We were down in 2019 through June but then in July there was a little bit of a bounce in the Housing Market through September. It looks as though things are stabilizing a bit. We’ll be watching.
Forecasted Year-Over-Year Percentage Change in Price
In this graphic, the dark blue represents the strongest projections; which states will appreciate at the highest level. Medium blue, where we are, is still very good for price appreciation over the next year or so.
Year-Over-Year Housing Supply
Geoff and panel, prior to the webinar, had been discussing how few homes there were in the market. Needless to say, you can see that the housing supply year-over-year is tight at best. It is getting better, but is still tight. This subject will be included in the Panel Discussion.
2019 Projected Home Price Percentage Appreciate Going Forward
Looking forward to price appreciation as indicated by some of the thought leaders in the industry. They put out stats that indicate their thinking, and it appears that everyone is looking at a minimum of 2 to 3% price appreciation going forward into 2020. It seems that no one believes this housing market is going to fall apart in any way, shape or form.
Mortgage Rates and Mortgage Rate Projections
Mortgage rate projections beyond where we are now look very much the same. It does not appear as though projections are really going up or down.
Orange County, NY
Units Sold
Units sold is what Geoff considers the “mother’s milk” of all the analytics on the housing market. The green line represents 2019 and has pretty much been down year-over-year. The red line represents 2018. We only bounced above 2018 three times during the first ten months of this year. However, we’re still at a very high historic level despite the year-over-year decrease.
Average Sales Price
Average Sales Price is strong. The difference between this year and previous years in the year-over-year is pretty significant. Looking at just year-over-year appears to be a mixed bag. However, historically a very high pricing market.
Ask to Sold Ratio
Ask to sold ratio is the ratio between the last asking price and the sold price of a home. It is still very strong. The higher the line, the closer to 100%, means that sellers have to negotiate less off their last asking price. Again, historically very high points, but nonetheless, appears to be cooling off just a little.
Days on Market
Days on market is pretty much lower, though we do see the green line intersecting with the red last month. That really hasn’t happened previously. Again, another small sign of things cooling off.
Sussex County, NJ
Units Sold
In Sussex County we’re also seeing a mixed bag. The green line is bouncing up and down versus 2018 and 2017.
Average Sales Price
The graph indicates a pretty strong pricing market. Prices are about as good as they’ve been in Sussex in six years. If you’re a seller, it is probably not a bad time to think about putting your home on the market.
Ask to Sold Ratio
Again, the ratio between the last asking price and the sold price of a home. This is still very strong. If you’re a seller would you prefer negotiating 2.5 points off your asking price, or almost 6 points? That’s the difference between 20014, 2015 and 2016 and now. Geoff recalls those years as being difficult to get deals done.
Days on Market
Here in Sussex County we don’t see any intersecting lines. Though we have seen some close variances. It is tightening up a bit. We’ll watch to see where that heads.
Housekeeping Items
The next Housing Market Update will be on Tuesday, December 17 at 2 p.m You can sign up at GreenTeamRealty.com/HMU.
Thank you to our sponsor, REALLY, The Real Estate Referral Community. REALLY is where Professionals who serve the Real Estate Industry can connect, communicate and securely exchange referrals with speed and ease. And there are no fees on commission exchanged between Agents. Join for free at ReallyHQ.com
Meet Our Panel for the November 2019 Housing Market Update
Our panelists this month are (left to right): Keren Gonen of Green Team New Jersey Realty and Carol Buchanan of Green Team New York Realty.
Our moderator is Geoff Green, President of Green Team Realty.
Thoughts on where the Orange County Market is heading in 2020
Geoff asked Carol where she sees the NY market heading. She believes 2020 is going to be an excellent year. Inventory is still down, there’s no doubt about that. However, there are very active buyers out there, looking for a nice home in the price range they can afford. They’ll jump on it right away when they find the right home. Inventory is a bit of an issue. But she thinks as more homes start coming on the market 2020 will be a fabulous year.
Geoff remembered that Carol joined the panel of the Housing Market Update about a year ago. And at that time she said that 2019 would be a strong year, although numbers seemed to be deteriorating. Geoff didn’t know where those numbers were headed at that time. His experience as a real estate professional back in 2004 and 2005, when numbers dipped and didn’t come back for 8 years, had him concerned. However, seeing numbers start to dip 18 months ago and now suddenly playing out and maybe coming back together, is a breath of fresh air. So, Geoff congratulated Carol for “calling it” during that HMU and is happy she’s predicting a good year in 2020.
Thoughts on where the Sussex County Market is heading in 2020
Keren agreed with Carol. She thinks that one issue in Sussex County is that a lot of sellers are hanging on to their houses, just waiting to see what happens. Keren said that all homes priced properly are gone the same week that they’re listed. She took some buyers out the previous Monday to look at some houses. Keren told them if they saw something they liked they needed to jump on it. They said, no, they wanted to look at some other houses. Two days later they came back to her and said they wanted to put in an offer. However, the house already had an accepted offer! She hopes they’ll listen to her advice and not wait to put in an offer the next time they see a house they like.
Pricing a Home Properly is Key
Keren emphasized that it’s important for all real estate agents and sellers to make sure the home is priced properly. If you’re looking to sell right away, let your realtor know that this is what you want to do. If you want to sit on the market, they can do that, too. However, if you want to sell, this is the time to do it. In the spring, everyone else will be listing. Geoff agreed that during his 15 years in the industry the one thing that is always true is you have to price it right. It doesn’t matter if it’s in a down market or an up market or somewhere in between. If you don’t price the property right, it’s not going to sell, for many reasons.
Bank Inventory
Geoff always checks in with Keren on foreclosures. He asked if banks were still holding on to the properties, renting them out, or flipping them themselves. Keren said that banks are starting to release properties. Their only two strategies are: We’re going to list high and see if anyone bites because the house is in good condition. Or, we’re going to list really low and have everyone jump at it. Keren, who buys and flips homes, recently went to see a house. There were ten other people there during the half an hour she was there. The listing agent came back with “highest and best.” She’s sure the house will sell higher than it should have. Because there is not enough inventory listed low for the flippers, they’re all going for it.
Appraisals
Geoff asked if either Carol or Karen was experiencing any problems with appraisals. Carol replied that she hasn’t had much trouble with that. Basically homes are appraising with no problem. Geoff stated that about 2 years ago, when prices started to shift dramatically, there were a lot of problems with appraisals. Fortunately, that problem has gone away rather quickly. However, anytime the market turns on a sharp incline, appraisals will be a problem again. They can prevent buyers from getting the loan they need to move the transaction forward. It can be difficult for appraisers to get the comps. If the comps don’t exist, new deals are coming in higher than the last one and the market’s moving up, appraisers have to take a leap of faith. Many were hesitant to do that as the market hadn’t increased in some time. Now that price appreciation has been going on for some time, it seems to be okay.
Keren said she’s always there at appraisals and always has the comps that she gives to her clients. She also tells the appraiser about everything in the house they may not see. That might be foam insulation, updated electric, something in the basement or a whole house generator. She understands that appraisers add a dollar amount for that. That’s been helping her appraisals come in at the correct price.
Lack of inventory in the sweet spot
Referring to middle of the range pricing, Geoff said it’s surprising to see the lack of inventory. Only approximately 6% of the market is in the sweet spot, whereas there is much more inventory at higher levels. Even more significant is more inventory at lower levels (very inexpensive homes, homes needing lots of work, etc.). Geoff thought it interesting and finds that as a society we’re moving away from one-income households. Most households are two income. And they just don’t have time to do renovations or be bothered with it. They want a house to be well located and in good condition. Otherwise, most people don’t want too much to do with it. He asked the panelists if they agreed.
The importance to sellers of having a home that doesn’t require buyers to do renovations and repairs
Carol absolutely agreed. She said looks do matter and when you go up to a home that’s nicely landscaped and well maintained, people just jump on it. Most people are looking for a nice home they can put their own finishing touches to, but which is not overwhelming for them. Geoff said there are some interesting business models popping up around the country. Companies are financing renovations to help sellers get out and maximize their home’s value. And they’re not just providing the financing. They’re doing the design, the build and the financing. It will be interesting to see how these models work out in the dense metropolitan areas they are starting out in. There is a real value to this. Some people will simply not buy a home unless it’s in good shape and finished. So, if you’re a seller, if you don’t have the time and money to do the work, this might be an option.
Geoff has seen many agents, both in the Green Team and other agencies, who go out of their way to assist with that process of helping sellers get their home together and renovated. He talked about Keren literally rolling up her sleeves and clearing up a yard. While Keren isn’t able to do that for everyone, it just demonstrates a willingness to help clients get a good result. He gives credit to all the hardworking realtors in the industry who go out of their way to make that happen. Carol agreed with that, too. A lot of realtors go above and beyond. Geoff said that it’s a testimony to the industry and they deserve a lot of accolades.
Geoff’s quote on Real Estate Professionals
We are the grease on the wheels of the housing industry. Without it, people wouldn’t be getting as much money for their homes, or be able to make the moves that they do. You need the grease to keep the wheels turning – and that’s us!
Keren definitely thinks that when your realtor is willing to go the extra mile for you, that’s what really counts. Most of the people she’s bought and sold homes with were actually people she talked to on a regular basis. Whether it was a Facebook or text message, or an invite to a party. It becomes part of your circle. People that you care for, people you spend time with. In the most stressful time of their lives, to be there and hold their hand and let them know everything will be okay, means a lot. For the client as well as to her, because they’ve allowed her into their lives.
One last question: Do you think home appreciation will increase in 2020 vs. 2019?
Keren absolutely thinks so for Sussex County. Houses that possibly last year or the year before listed lower are now listing higher and selling. She’s pretty sure that trend will continue into 2020.
Carol definitely agrees and thinks that values are going up. No doubt about it!
Here’s how to contact our panelists
Keren Gonen, Green Team New Jersey Realty – 551-262-4062 (cell): Call or Text. You can also Google Keren to find out more about her.
Carol Buchanan, Green Team New York Realty – 845-705-9162 (cell): Call or Text, Or email her at CarolBuchanan97@gmail.com
Thanks to Melissa Bressette, Marketing Director, Green Team Realty, for putting this webinar together.
We’ll see you on December 17th at 2 p.m.
October 2019 Housing Market Update
Geoff Green, president of Green Team Realty, welcomed everyone to the October 2019 Housing Market Update. The webinar was held October 14 at 2 p.m. on Facebook Live.
National Housing Market Statistics
RECESSION RECESSION RECESSION
Everyone’s talking about it. Geoff thinks probably the impending 2020 US elections have a lot to do with that as well. The simple fact is that more and more people are starting to think that it will happen. .Because of that, we need to address it. No matter how much less impact we feel this recession would have on the housing market than the last one was, it’s still going to have an impact.
The above charts show a survey of different analysts and influencers in the economic world. Most think the recession will come in 2020. Again, it will be interesting to see the affect that the elections will have. Needless to say, the vast majority believe the recession will start within the next two years, 2020-2021.
Recessions don’t necessarily mean a bad housing market
A recession does not mean that there has to be a sharp decline in price. Or an overall reduction in home valuations. The last series of recessions dating back to 1980 and only two of them had negative price appreciation. That’s important to note. Geoff believes that the bottom will not drop out like it did in 2008. That was a very scary time for the real estate industry. There are now a lot of economic fundamentals in place that should lead to a better downturn, if one were to come.
Projected Home Price % Appreciation holding steady
Again, stake holders, influencers in the world of economics are predicting that not only will pricing on a national basis not go down, but it will continue to appreciate. Not at the pace seen in the last few years, but these numbers are probably healthier. The rapid market we were seeing wasn’t going to last forever and could not be sustained. There is nothing wrong with appreciation slowing and growing at a slower pace.
Regional projections
Corelogic shares its forecast for Year-over-Year percentage of change in price, according to markets throughout the U.S. From this it appears the northeast is looking good.
Local Housing Market Statistics
Orange County, New York
Geoff had expected the green line for units sold to be lower for the third quarter. However, it really held out very well. If you look at July, it was above all previous six years. August was a touch below. And September was even. So it was a good third quarter.
Average Sales Price is doing well. It’s well above where it’s been the last 5 or 6 years.
This is the last asking price versus the sales price. The market is becoming a little more competitive. Sellers are having to negotiate a little more off their selling price. Again, as the market is cooling it’s bound to happen. However, we are not seeing a precipitous decline here.
Days on market is still extremely low. Not one month dipped above any of the previous years.
Sussex County, New Jersey
Although the year started out slower in Sussex County, it caught up in the third quarter. The third quarter was strong, which is important.
Average price is holding pretty strong.
Despite a few dips, Ask to Sold Ratio is remaining at a very high level.
Days on market, not one month has risen above previous years, showing that the market is still strong.
Life events determine buying a home, not market data
Buying a home is based on our life events and where our lives are going. This is good advice. As realtors we want you to find a good home in the place you want to be. If the above three items are all in check, it doesn’t really matter what market you’re in. You’ll make a good decision and you’ll buy a good home.
Housekeeping items
Sign up for Housing Market Updates at GreenTeamRealty.com/HMU. And thank you to our sponsor, REALLY. Join the Real Estate Referral Community for free at REALLYHQ.com.
Meet our Panel
From Left to Right: Toni Kreusch of Green Team New York Realty and Keren Gonen of Green Team New Jersey Realty
The Fear Factor
Geoff started the discussion, asking about the fear factor. Should people be afraid? Should they hesitate? Keren replied that in her experience, people are always afraid of the unknown. That’s one of the reasons people are holding back, whether selling or buying. However, what she did with one of her clients who was buying in Highland Lakes, was advise him to review the previous month’s housing market update. After taking all the information in, that client put an offer on a property and wound up getting the house he wanted. Before learning more about the market, he had been apprehensive about even buying at that time.
Also, Keren reiterated that interest rates are really low and should be capitalized on. Whether refinancing, buying, downsizing, this is the time to do it. Geoff agreed that rates have been so low it’s remarkable. Especially now, at the end of the day, Geoff’s advice is that it’s all about monthly cash flow. What is it going to cost me each month to live there? And do I have enough income minus my living expenses to be able to pay my mortgage, save for retirement, etc. So, financing really matters.
Toni agrees that people can purchase more house for their money and often pay the same or less if you are currently renting. By owning a home you’re building wealth. What better way to save money as you move into your future?
Would a buyer’s market not be the ideal time to sell?
It’s hard being a broker because there are always two sides to a discussion: there are buyers and there are sellers. One would think if we were in a buyer’s market then it would not be the ideal to sell. There would be lots of inventory, you’d be competing against other people, downward pressure on the price of your home, etc., as opposed to a seller’s market. Geoff believes it is the right time to sell. If you’re someone at or near retirement who has been thinking about getting out it is the right time. Even though we’ll be seeing price appreciation for another few years, even if it goes flat or goes down a little, we’re not going to see a roaring uptick at any point of time in the very near future. Pricing is probably as good as it’s going to get. He asked if Keren and Toni agreed.
Keren agreed. And Toni said we’re experiencing a special time right now, with low-interest rates and low inventory. It’s a great time to buy and sell. From a seller’s perspective, Geoff would advise sellers to put their home on the market now.
Is the Holiday Season not the ideal time to sell?
With Thanksgiving, Christmas, and Hanuka coming, these are low transaction months. Many people put aside their buying regimen during the holidays. Less people are identifying homes in November, December, January. However, one phenomenon Geoff has seen was the buyer who needed to buy a home in December. There wasn’t a lot of inventory and they paid too much for a house because they had to buy. A few months later lots of inventory rolled out and prices were lower. As we head into the holiday season, there are still buyers out there who haven’t found what they wanted yet. They don’t care if it’s December. They’ll still want to look and will buy the right house..
More than most any year that he’s seen since being in the business, Geoff recommends if you are a seller thinking about selling, if your home is ready, put it on the market. Don’t wait until Spring. It’s very busy now. Right now is a very good time. Toni said they still have people calling in and coming into the office who appear to be serious buyers, not just lookers. Keren stated that November has always been her biggest month. People looking in the winter are serious. You’ll probably get less traffic, but the showings are going to be more serious. If it’s priced right, there is enough intensity in the market to get transactions.
This is the time to buy – and the time to sell
Geoff predicted that if someone is going to buy a home and is planning on living there at least a 7-10 year period, they’re fine. Even if the market goes down during that time, it’s going to come back up and re-appreciate. The last downturn lasted a really long time. Looking at it on a hyper-local level, it lasted 8 years regarding pricing. It dropped precipitously in 2008 and did not restabilize until 2016. Eight years of price declines is rare in terms of the history of the housing market. He just does not see that happening this time around. While the market may continue to soften for some time, he doesn’t think it will drop that low. And he believes it will come up relatively soft, compared to the rapid rise the last time. This follows the principles of physics. For every action, there is an equal and opposite reaction. The markets tend to do the same thing.
Geoff asked Toni and Keren if they agreed with the premise: if a buyer is going to live in a home 7-10 years, they should be just fine in terms of outliving any market turbulence. Keren did agree, and also reiterated that now is the time to sell. If you’re looking to downsize and you’re on the fence, this is it. We have good qualified buyers and low-interest rates but don’t know how long this will last. Like Toni mentioned, sometimes you can purchase with a mortgage less than a rental. That’s important to mention again because it is the time to buy and sell.
Suitable Housing clause
Geoff mentioned that you can structure your listing to make it subject to finding suitable housing. For example, if a retiree worried about finding housing after selling their home a suitable housing clause could be utilized. However, you do have to give buyers reasonable terms on that clause. It is an option to discuss with your Green Team sales associate if this is a concern.
Selling in a bad market
Geoff recounted that a majority of his listings were during a really bad market. Listings would languish and go on and on, very different than the market we’ve been seeing the last 3-5 years here. To those buyers or sellers going through the transaction process, Geoff offers some advice. Sellers may have a home listed and haven’t had any showings, or maybe many showings but no offers, or offers that fell through. Sometimes the reason that sellers are in that place is because the property is priced too high. A lot of people are not willing to admit it, but it is a fact. To those in that situation, what is going to matter most to you when closing is done is not the bottom line on the closing statement. It’s going to be that it’s over and done and you can move on with your life. Far too many people are trying to get an extra $5,000 or $10,000 while they’re spending $1,000 a month on taxes, interest payments, utility costs, maintenance. That all adds up quickly. They’re also not factoring their own well being, factoring in the stress that comes with the whole process. If you’re a seller and you’re thinking of selling, go for it!
Keren’s thoughts
Keren agreed. She stated that sometimes sellers have it in the back of their mind that they are going to get “X” amount of dollars for their listing and they end up being listed for 6, 7, 8 months. As an agent, Keren believes it’s imperative to make clear that we have several different options. If you are looking to sell quickly, this is where we need to be. This is your market value because as realtors, this is what we do day in and day out. For some sellers the home has sentimental value and they are also concerned about the bottom line. There’s a thin line to walk when discussing price.
Toni’s thoughts
Toni said that working with motivated sellers is helpful. So is aggressive marketing, which is done by your agent. And, if your home is not selling, you should certainly consider a price reduction.
Final thoughts
Geoff hoped that this discussion helps people in this position, who may be agonizing over whether to drop their price. Remember, if the house is priced right, you’re going to get a good offer with reasonable terms. Buyers are looking to move on, too. They need a house, need a place for their family.
Reminder: The next Housing Market Update will take place life on Facebook Tuesday, November 19, 2019 at 2 p.m.
To reach our panelists if you’d like to buy or sell a property or learn more about the housing market
Keren Gonen – 551-262-4062
Toni Kreusch – 845-283-2450
August 2019 Housing Market Update
August 2019 Housing Market Update
Geoff Green, President of Green Team Realty, welcomed viewers to the August 2019 Housing Market Update. It was held on Tuesday, August 20 at 2 p.m. on Facebook Live.
National Housing Market Statistics
Recession? So what’s the story?
We’ve all keep hearing the word, and the questions… Is it going to happen? Is it not going to happen? In Geoff’s view, that’s always up for debate. We know that at some point it is going to happen. Maybe not right now. However, the question is does a recession lead to a housing crisis?
Based on what he has been hearing from industry experts, Geoff believes that a recession will not lead to a housing crisis. Rather, it appears that the market is normalizing. Over the past three years we’ve been experiencing a super hot seller’s market. Things have been going very quickly. It has not been a normal market, where homes take longer to sell, Prices aren’t dramatically increasing. Things are a little more where we’re headed. Although right now we’re rather hot, looking at numbers and seeing into the future, Geoff does think that things are cooling and we headed towards that more normalized market.
Contrary to the hand-wringing, the U.S. housing market is in fact normalizing, and that is mostly a positive development for the American economy.
Pending Home Sales
This graphic shows pending home sales on a national basis since 2014. It shows the trends, the ups, and downs, including seasonal fluctuations. Usually, we peak in the 2nd and 3rd quarters of each year, which is where we are right now. However, you can see how low we got nationally as opposed to the last 3 or 4 years. Again, this shows that the number of units selling throughout the country is definitely slowing down.
Pending home sales – which represent signed contracts on existing homes, and are therefore considered a leading indicator – have advanced to their best level since mid-2017. New-home sales, also representing signed contracts, have been bumpy in recent months but have climbed about 15% so far this year.
Are Americans planning to buy new homes?
This not-for-profit organization put together this survey on the percentage of Americans planning on buying a new home in the next six months. What they discovered? Americans are quite bullish on buying homes. In fact, more people are considering buying a home than we saw in 2006, 2007, 2008…
With the numbers gradually increasing, home ownership is still on the forefront of peoples’ minds.
According to the Conference Board, buying intentions for new homes have exploded to levels not seen since before the financial crisis.
The S&P Homebuilder Group
This consolidated group of stocks were compared from June 2018 to June 2019 (in blue). The 30 year fixed year interest rate is in orange. You can see there is a consistent relation with one another. However, even though rates are still low, confidence in gaining in the stocks in the Homebuilder group. It appears that Wall Street is still seeing opportunity for growth and profit in this sector.
The S&P 1500 Homebuilder group has rallied 35% in 2019 to a new 52-week closing high in mid-June.
Housing Affordability Index
This chart shows housing affordability from 1999 to 2019. Historically, at least since 2008, 2009, we were at a low level. Homes are very affordable in terms of what people are able to generate in income through their occupations. Although prices have been rising, it’s still a relatively affordable market, and much of that is due to interest rates
The higher the graph, the more affordable homes are.
It’s more affordable than the normal markets that preceded the Boom and Crash.
Typical Mortgage Payment
In January 2000, the typical mortgage payment was $1,100 because rates were significantly higher.. Now the typical mortgage payment is $910. Prices nationally are at a much higher level. However people are able to buy people are able to borrow at a lower rate, so their payments are less. Most people in the world have to deal with here and now. “I have to pay my mortgage this month, I have to get my child into camp this month. I’ve got to make college payments this month.” It’s hard for people to look out further than a month or two or three in advance. So this monthly analytic is very important.
Adjusted for inflation, today’s typical mortgage payment is less than what it was prior to the boom in January 2000.
Part of the reason is wages are up and Interest Rates are still statically low.
Payment as a Percentage of Income
Per Geoff, there is an old adage in real estate which says, “You name the price, I’ll name the terms!” You want $500,000 for your property? Well, if you are willing to give it to me at a low enough interest rate with a really long amortization term, it will cost me hardly anything to carry on a monthly basis. I can acquire the property, rent it out and achieve much more income that needed to service the debt.
Real Estate is an asset that can be leveraged and therefore the rate at which leverage can be gained is very important. The drop in rates is very significant to this market and where it is headed. If we were in a rising rate atmosphere we would be having a very different conversation.
According to Mark Fleming, First American’s Chief Economist: The difference between buying a home versus other goods is that we buy them with a mortgage. So, it’s not the actual price that matters, but the price relative to the purchasing power.”
Local Housing Market Statistics
Orange County, New York
We’re starting to see an upturn in number of units sold in Orange County. July was the best month we’ve seen in a long time. We had been lagging for a while but
Average sales price continues to increase in Orange County. There had been a cooling-off period for awhile, but over the last three months there has been a steady increase. 2018 showed a definite increase over prior years, and 2019 shows signs of continuing the upward trend.
The last asking price versus what homes sold at. 98.53% means Seller are only negotiating 1.47 percent off of their asking price. If you are a Seller whose home is on the market and you’re not getting offers, note that this is the last asking price, not the initial. The key is to having a good, competitive asking price. You can’t put your house out there at just any price and expect these kinds of numbers. However, if a home is priced right, you may hit this ratio.
Sussex County, New Jersey
Over the course of a few years we’ve been watching the comparison of the housing market in Sussex County, NY versus Orange County, NY. The numbers are consistently a little lower in Sussex than what we’re seeing in Orange. This is a pretty consistent down trend over 2018 and 2017 and hasn’t gotten above 2018 except for March of this year.
While Geoff does not see this as a steeply declining market, he does think that prices are softening.
This is a very strong number. While not quite as high as Orange County, it is still a very good number. Only 2.4 percentage points off the asking price, much better than it was a few years ago.
Things are definitely moving in Sussex. There are less days on market than in Orange County. It’s a very robust market in Sussex County.
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Meet our Panel
From left to right, Keren Gonen and Pam Zachowski of Green Team Team New Jersey Realty and Toni Kreusch of Green Team New York Realty.
Geoff opened the discussion to comments from the panelists on the information presented.
Low Interest Rates
Keren Gonen began the conversation by noting that interest rates are so low that a lot more people can qualify for mortgages. When the rates are high, many people just can’t make it on a monthly basis. They can’t afford the house they wanted and pay their other expenses and debts as well. Low interest rates not only allow for buyers to make smarter decisions but also to become eligible for financing. This is also causing low inventory. Even though the market has softened a bit, it’s still a seller’s market. When a good house comes on the market it does not stay there for long. Keren sees bidding wars on a daily basis. She tells clients if they love the house, let’s jump on it. You don’t have to go to asking if the price is ridiculous, but get your foot in the door. The house will not stay. And, when they do not listen, they lose the house.
What is a good house?
Geoff noted that Keren had mentioned “good house.” He went on to describe what he sees as a good house. A house in good condition and well located and there’s a good asking price, it’s going to sell. The old adage is “Location, location, location.” What Keren tells her sellers is to figure out their time line. Do they want to sell right away, or are they willing to let the house sit on the market for a few months? If they want to sell right away, the house needs to be priced to get offers within a week or two. Or do they want to price higher and sit on the market. She leaves the choice to them. Knowing where they stand, what the market is, will help determine what they want to do. Keren believes it is important for agents to educate their sellers and buyers so that they can make the best decisions.
Real Estate – Still a good investment
Pam mentioned she had been listening to Suze Orman in the morning, who was talking about how we were likely going into a recession. However, one thing she pointed out was that real estate was still a good option. She doesn’t anticipate another housing crisis like we had before. She says it’s normalizing and real estate is still a good investment to have. Geoff went on to say that real estate is always a good option. It’s important to make sure you make the right purchase and there’s good logic. If you need a place to live and you’ll be there for at least 3 to 5 years, it doesn’t pay to rent. Even if the market takes a downturn, there are still a lot of advantages to home ownership over renting. He believes that home ownership should be the core of wealth management strategies.
Toni mentioned that for anyone considering buying or selling, home prices are appreciating at a more normal rate right now. And they have been for the last 10 years. With forecasts predicting that with growth continuing at this normal rate and interest rates being low, it is really a great time because you’ll get more money over the life of your loan, and you’ll get more house for your money. Geoff noted that the big takeaway for anyone going to buy a home and planning on living there, you can never really time the market. It’s best to just get in and go for it. Over the course of time your home will appreciate and you will build wealth.
Is low inventory still the major headline for our local markets?
Geoff addressed this question to the panel. Is the lack of inventory a problem for all of the buyers you’re running around, trying to find homes for? Toni agreed that there is a shortage of houses. Geoff asked if it’s mostly the middle range that is so short, or is it the lower or higher end homes that have low inventory? Pam said there is definitely a shortage of homes for investors. She said it is very hard for people to find that house to flip. Also, she feels there are not enough mid-range houses out there. Buyers are looking but just can’t find what they want.
Toni mentioned that first-time home buyers are competing with investors for those lower-end homes. In the higher-priced market, you have the pick of the house. Geoff agreed that the high end has been dragging nationally for some time now. There seems to be a shift in what people want now. They don’t seem to want big homes, higher taxes and big utility bills. People in general are more concerned with smaller footprints. The panelists agreed with Geoff on these points.
Keren mentioned that she is seeing young buyers heading up to Sussex County where they can afford to own a home with a mortgage less than their rent would be in other areas. Geoff agreed. Here in the northern suburbs from New York City there are amazing places to live. It’s a fraction of the cost of living in the City and some of its immediate surrounding areas.
In summary
We’re still in a very strong market. It will be interesting to see what the future holds. Geoff said that many economists are fearful of the possibility of an impending recession within the next 18-24 months. However ,many people feel that the strong housing market is one reason we may not slip into a recession. Even if a recession happens, perhaps the housing market will be okay.
To get in touch with the panelists for your real estate needs:
Keren Gonen – 551-262-4062
Pam Zachowsky – 201-452-0516
Toni Kreusch 845-283-2450
Join us for the next Housing Market Update
September 17th at 2 p.m. Stay informed! Sign up for our Housing Market Updates at: GreenTeamRealty.com/HMU
Sept 2019 Housing Market Update
Recap
Geoffrey Green, President of Green Team Realty, invited viewers to the Sept 2019 Housing Market Update. The update took place on Sept 17, 2019, 2 p.m. on Facebook Live.
National Housing Market Statistics
Recession Worries
According to Geoff, we’re starting to hear the word recession far more than we did a year ago, far more than six months ago. The big buzz is, are we headed to a recession? If so, when? And how dramatic will it be? The bottom line is most people think we won’t be experiencing anything like we went through from 2008 to around 2016.
“The housing crash during the Great Recession left a lasting impression… But as we look ahead to the next recession, it’s important to recognize how unusual the conditions were that caused the last one, and what is different about the housing market today.” Jeff Tucker, the Zillow Economist
Reasons why housing prices and the real estate market should remain strong
- Many people are in a very strong equity position as far as their home goes. That’s the amount of money that is in the value of the home. If you know the fair market value of your home minus the pay off amount of your mortgage, the difference is the equity. Keren Gonen and our Producer, Melissa Bressette, were discussing that over one-third of US households are free and clear of any mortgage. That is a very strong number. From a balance sheet perspective, we’re doing very well as a nation.
- We’ve had good appreciation over the last few years. It continues and most experts agree that despite the market slowing, appreciation is still going to be something that will continue for the next 12 months at least. The question is really by how much.
- Inventory levels are still relatively low. Days on market are low, bidding wars are still happening.
- Mortgage and interest rates are fantastic. Geoff thinks that if you had asked a lot of mortgage professionals a year ago where rates would be now, they would not have predicted how low rates would be. The low rate environment is continuing to fuel the real estate market.
- There is a level of affordability we haven’t seen in a long time. When you package everything together; earnings, mortgage rates, taxes, prices of homes, etc.you get affordability rates that are historically high. That is, how affordable it is for the average American to buy a home.
Equity
Here we’re seeing year over year appreciation growth. It is still very strong. Still where it was a couple of years ago. Percent of negative equity share refers to who is in negative equity situation. That occurs when the mortgage payoff is higher than the fair market value of the home. That has been steadily declining since 2010 and we are now at the lowest level since then. Those are very good signs.
Appreciation
A quick glance at the map of the U.S. on the left side shows nothing is below “0” and everything is still appreciating. Then we review the right side, which examines year-over-year change in price by price range. All price points are in grey. Lower end homes have a bigger market, more demand, which drives up price. However, even the high range homes are experiencing appreciation.
Pricing
Corelogic,a leading provider of statistical data on the housing market is projecting, per the above map, that over the next 12 months the nation will go up another 5.2%. That is a very healthy rate of appreciation. In addition, some other sources, shown here on the right, are predicting a fairly substantial level of appreciation, even into 2021.
Inventory
Historically, left to right, we are still at a very low level of inventory, which means that pricing should continue to increase. or stay strong year over year. Year-over-year inventory levels, we’ve had a bump at the end of 2018, beginning of 2019. Now we can see inventory starting to tighten up again a little.
Mortgages/Interest Rates
Where are they headed? Where are they now? We can see from January 2018 to today the rates that could not have been predicted a few years ago to be so low. And we recognize that this is a good spot that we’re in.
Affordability
On the graph to the left, the yellow line represents median home price while the blue represents purchasing power. It’s evident that there is much less of a variance between the two up to 2005, which was the worst period of time. But we’ve stayed strong. During the crash, home prices went down while affordability went up. And it hasn’t really changed. There is still ta good opportunity for people to secure one of the most important assets they ever will own – a home.
Historical Recession Data
Geoff agrees with everyone who believes that this recession will be much shorter than the last one. The housing market is in a better position. We have better fundamentals in place than we did the last time around. There is not nearly as much sub-prime lending as there was. Of the last five recessions, home prices went down in just two. Home prices went up in the other three.
Having gone through the last recession, it can be hard to believe that prices can actually rise. But maybe this one will go that way as well.
Resource Center
Each month we bring you stats, data and quotes from various trusted industry sources. These resources will now be available to you in our monthly Housing Market Update recap blog post, which can be accessed from GreenTeamRealty.com/hmu/ under Housing Market Recap.
Local Housing Market Updates
Orange County, New York
Units Sold
It’s been a mixed bag this year. The green line is 2019. It’s fair to say the number of units sold is consistent with 2018. We’re definitely seeing a slowing in the number of transactions. But, it’s still a very high historical level. And it’s still a very strong market. So, yes, it’s cooling, but it’s still a very high rate.
Average Sales Price
The average sales price took a little dip this month.That doesn’t mean that prices will ultimately continue to go down year-over-year over 2018. However, units sold has been slowing. Geoff believes we’ll see a softening of the market, rather than a crash.
Ask to Sold Ratio
The last asking price versus what the house sold for and the ratio thereof. As you an see, this year it’s been high, meaning sellers haven’t had to negotiate much off of their asking price. However, recently we’re seeing a dip, which is worth noting.
Days on Market
The days on market have consistently been lower than the previous 6 years, remaining a strong factor in the market.
Sussex County, New Jersey
Units sold
There is a similar situation here in Sussex County; a mixed bag, up and down. However, it’s clear that in the last 18 months or so, the number of units sold has been slowing.
Average Price
It’s interesting that all through this time period average price in Sussex was kind of languishing. And now we see prices taking off,. almost the highest level of prices in the county in almost 8 years. Only July of 2018 was slightly higher.
Ask to Sold Ratio
The ask to sold ratio is again similar to what we’re seeing in Orange County. at 97, 98%, it’s still a strong market with sellers only having to come down a little bit off their asking price.
Days on Market
Days on market are lowest over last 6 years. The market continues to be strong. Further discussion will take place with our panel.
Thank you to our sponsor
Meet our Panel
Keren Gonen is from Green Team New Jersey Realty and is a regular panelist on our Housing Market Updates.
Geoff asked Keren what’s actually happening in the field; if there are signs of the market taking a downturn.
Keren stated that it’s important to note that there are still people buying. still people selling, and there are still bidding wars due to low inventory. On both sides of the border we’re dealing with a lack of good houses. Now that it’s so easy and affordable to buy a good home, it’s really a question of inventory. Some sellers are on the fence, waiting to hear what will happen in 2020. Agents and Sellers would like more inventory to choose from. However, if agents educate their sellers we’ll see a lot more houses on the market in the coming months.
Geoff asked if Keren has found buyers becoming more picky as time goes on. Keren replied that it’s the opposite; Buyers are rushing to put in offers on the houses that they like. She said we want to make sure that good houses on the market do sell quickly, because that makes everyone look good. Whether it’s the listing agent or selling agent, everyone does better in that type of a market.
From the Seller’s perspective, Geoff asked if Keren agreed that we’re not in a market where they can list at any price and sell. Keren stated that surprisingly all the listings she’s had have either come in on point asking price or a few thousand dollars above asking price due to bidding wars. In addition, they’re going under contract very quickly. Attorneys are moving them along, with attorney review much faster than earlier in the year and last year. She had one listing got out of attorney review in literally 48 hours, which was a first for Keren.
Pricing
Geoff said he was sure that Keren was choosing comparables carefully to make sure the information is accurate and she’s setting a good asking price. She replied, absolutely. That’s the first thing – Listing Agent 101. You want to make sure you do your comps properly so that you don’t sit on the market. Geoff stated that ‘s the message to all Sellers. The hardest conversation to have as realtors is price reduction. It’s kind of like having mud on your face. We’re the ones who bring in the comps, make recommendations on what we feel the fair market is for their home, Many Sellers don’t listen and just want to list at the price they want. But many people do listen. However, sometimes a price reduction is necessary. However, no matter what market you’re in, you have to price it right.
Keren said one of the things she does with all of her Sellers is ask them what their time line is for selling their home. Meaning, are we okay to sit on the market for 3, 4, 5, 6 months? Or are we looking to get an offer within the next month to 2 months. Then, according to what they tell her that’s where she prices the house. She has had clients that tell her they don’t care when they move, the house is paid off and they’re not in a rush. And they want a specific amount for their house. So Keren tells them that’s okay as long as they understand that according to her market analysis, they won’t sell until we reach this price. As long as they understand that, she’s fine with listing it at that price. Ultimately it’s always the Seller’s decision.
The recommendation
Price it right from the beginning. Price it to sell from the get go. You’re likely to get a higher price. There is never a better time to sell your home than when you first list it. It’s new, there are buyers out there waiting for the next house to come out on the market. They’ve been out there looking and haven’t found what they’re looking for yet. Now your home is new and it’s on the market.
Bank Inventory
Geoff asked Keren what she is seeing as far as bank-owned inventory. He considers Keren to be a leading expert in Sussex County on the subject. Keren stated that they are not seeing too much being released by the banks. Whatever was out there was sold. She hasn’t seen anything new that’s affordable for an investor or flipper or someone who wants to take on renovations on their own. It has been quite a few weeks since she’s seen those. She has seen some that are borderline, with a few things missing, but those are priced too high. There really isn’t any new release of inventory from them.
Geoff then asked if Keren is still seeing bank-owned properties continue to be rented, an anomaly that we’re seeing over the last 5-6 years. As far as Keren knows, they are, remarking that it seems banks now want to be landlords as well. Geoff mentioned some clients who rented a bank-owned property and once they got in there was problem after problem. It was discovered that there was a lot of substandard that had been done. Caution people buying inventory to make sure that the renovations have been done correctly. The flips that Keren has seen by banks are usually bid out to the lowest bidder and that reflects in the workmanship.People can get caught up in the moment; the price seems right. And they may think they’re getting a better deal because the property is bank-owned.
Wrapping it up
Geoff has been in the real estate industry for going on 15 years. He has worked a lot of hours every week during those years and developed a great appreciation for agents like Keren, working in the field.The housing market in this country would not be what it is without the hardworking agents. They keep data accurate, make sure clients needs are met. Other market places around the world are not nearly as well run as they are here. We are getting into an age where it may be possible to just buy a home from Zillow offers, etc. However, the expertise, knowledge and support offered by real estate agents cannot be duplicated. Geoff’s final word… Find a Realtor!
Keren Gonen can be reached at: 551-262-4062.
