The housing market keeps sailing along. The only headwind that could take it off course is the lack of inventory for sale. The National Association of Realtors (NAR) reports that there were 410,000 fewer single-family homes for sale this March than in March of 2020. The key to continued success in the residential housing market is for more listings to come on the market. However, many homeowners are concerned that selling their homes could be challenging for several reasons.
Recently, Homes.com released the findings of a survey that identified these concerns, as well as what it will take for homeowners to feel comfortable selling their houses. Here are the four major homeowner concerns and a quick explanation of what’s actually happening in the housing market today.
In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on the ability to award benefits or eliminate costs on the other side.
In today’s market, buyers have compelling reasons to purchase a home now:
These buyer needs give the seller tremendous leverage. Most already realize this leverage enables the homeowner to sell at a good price. However, this leverage may also be used to negotiate time to find their next home. The homeowner could sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller finds a new home or has one built.
This gives the buyer what they want while also giving the seller what they need. It’s a true win-win negotiation.
This is the perfect time to maximize profits while selling a house. NAR just released a study showing that bidding wars are at an all-time high. The study reveals that when comparing the first quarter of last year to the first quarter of this year, the number of offers on homes for sale doubled from an average of 2.4 to 4.8 offers.
Whenever there’s a bidding war, the price of the item for sale escalates. Bloomberg recently reported:
“For the first time ever, the average U.S. home is selling for above its list price.”
If a seller is looking for a top-dollar sale, there’s no better time to sell than right now.
Again, leverage is the greatest strength a seller has in this market. Due to the lack of homes for sale, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after.
A recent post on whether or not to renovate before selling notes:
“It may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.”
If a seller is worried about doing work or updates on their home, they must realize that today’s historically low inventory likely renders these projects less critical to the sale of the house.
When speed is important, there are two points sellers should look at:
In the latest Existing Home Sales Report, NAR explains:
“Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. Eighty-three percent of the homes sold in March 2021 were on the market for less than a month.”
Eighteen days is fast, and it’s a new record. Here are the days the average house is on the market in each state:
Regarding the time it will take to close the transaction, all-cash sales accounted for 23% of all home purchase transactions in March. All-cash sales can usually be closed in thirty days. In Southeast Texas, appraisals can lengthen days on market due to the lack of appraisers. Expect 14-21 days for the appraisal from order to report received.
If a mortgage is necessary, the most recent Origination Insight Report from Ellie Mae shows:
“Time to close all loans decreased in March. The average time to close a purchase fell to 51 days, down from 53 the month prior.”
If you’re looking for a quick closing process, there’s never been a market in which the two-step process (finding a buyer and closing the deal) has taken less time. Check out the most accurate listing information on my website www.key2soldtx.com
Bottom Line
Selling your house can be daunting, especially in a fast-paced market. However, the fact that we’re in such a strong sellers’ market clearly eliminates many common concerns. Contact a real estate professional today to learn more about the opportunities for homeowners who are ready to sell. Resource: Keeping Current Matters, NAR
Mortgage rates are much higher today than they were at the beginning of the year, and that’s had a clear impact on the housing market. As a result, the market is seeing a shift back toward the range of pre-pandemic levels for buyer demand and home sales.
But the transition back toward pre-pandemic levels isn’t a bad thing. In fact, the years leading up to the pandemic were some of the best the housing market has seen. That’s why, as the market undergoes this shift, it’s important to compare today not to the abnormal pandemic years, but to the most recent normal years to show how the current housing market is still strong.
Higher Mortgage Rates Are Moderating the Housing Market
The ShowingTime Showing Index tracks the traffic of home showings according to agents and brokers. It’s also a good indication of buyer demand over time. Here’s a look at their data going back to 2017 (see graph below):
Here’s a breakdown of the story this data tells:
This shows that buyer demand is coming down from levels seen over the past two years, and the frenzy in real estate is easing because of higher mortgage rates. For you, that means buying your next home should be less challenging than it would’ve been during the pandemic because there is more inventory available.
Higher Mortgage Rates Slow the Once Frenzied Pace of Home Sales
As mortgage rates started to rise this year, other shifts began to occur too. One additional example is the slowing pace of home sales. Using data from the National Association of Realtors (NAR), here’s a look at existing home sales Nationally going all the way back to 2017. Much like the previous graph, a similar trend emerges (see graph below):
Again, the data paints a picture of the shift:
Why Is All of This Good News for You?
Both of those factors have opened up a window of opportunity for homeowners looking to move and for buyers looking to purchase a home. As demand moderates and the pace of home sales slows, housing inventory is able to grow – and that gives you more options for your home search.
So don’t let the headlines about the market cooling or moderating scare you. The housing market is still strong; it’s just easing off from the unsustainable frenzy it saw during the height of the pandemic – and that’s a good thing. It opens up new opportunities for you to find a home that meets your needs.
Bottom Line
The housing market is undergoing a shift because of higher mortgage rates, but the market is still strong. If you’ve been looking to buy a home over the last couple of years and it felt impossible to do, now may be your opportunity. Buying a home right now isn’t easy, but there is more opportunity for those who are looking. Resource: NAR & Keeping Current Matters
These 5 common mistakes made after you’ve applied for a mortgage to buy a home, can cost you the loan and a home purchase. Keep these key things to keep in mind. While it’s exciting to start thinking about moving in and decorating, be careful when it comes to your money and assets. Avoid thing common mistakes after applying for your home loan.
1. Don’t Deposit Large Sums of Cash
Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
2. Don’t Make Any Large Purchases
It’s not just home-related purchases that could disqualify you from your loan. Any large purchases can be red flags for lenders. People with new debt have higher debt-to-income ratios (how much debt you have compared to your monthly income). Since higher ratios make for riskier loans, borrowers may no longer qualify for their mortgages. Resist the temptation to make any large purchases, even for furniture or appliances.
3. Don’t Switch Bank Accounts
Lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.
4. Don’t Apply for New Credit
It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), it will have an impact on your FICO® score. Lower credit scores can determine your mortgage interest rate and possibly even your eligibility for approval.
5. Don’t Close Any Accounts
Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those aspects of your score.
In Short, Consult an Expert
To sum it up, be upfront about any changes when talking with your lender. Blips in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. Ultimately, it’s best to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.
Bottom Line
You want your home purchase to go as smoothly as possible. Remember, before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan. Resource: Keeping Current Matters
Here in Southeast Texas we are still experiencing low inventory and high demand, which means that some buyers are being forced to compete against each other for homes. While that might sound like it means less work for sellers, that’s not the case. Sellers still need to put their best foot forward.
7 common mistakes
It’s a seller’s market but we are seeing that normalization begin. A typical real estate cycle runs about 10 years and for Southeast Texas, due to a couple hurricanes, it has extended, but many of our markets especially over $275,000 are beginning to cool down. More days on market before an offer, List to Sale price ratio dropping to below 97% and price reductions from original list price with lower sales price. Sellers must still put their best foot forward. Competition between buyers is high, but not all buyers are desperate, and they will pass on your home if they believe that they can find a better option. Don’t risk losing money by not taking the process seriously. Similar blog posts www.key2soldtx.com
Like it or not, your credit score matters more than you think and is one of the most important numbers in your life, ranking up there with your Social Security number, date of birth, and wedding anniversary. This three-digit number is your financial report card, except there’s no getting rid of it after college.
Your credit score shows lenders just how trustworthy you are when it comes to managing your finances, and it can either save or cost you thousands of dollars throughout your life.
You can check your credit report 1 time per year to check for incorrect posts at https://www.annualcreditreport.com/index.action
If you’re in the dark about just how significantly this number can impact you and the details behind your personal score, here’s an overview of what you need to know before hitting the mortgage application process.
How Your Score is Calculated
Your FICO credit score is comprised of five elements, according to the Fair, Isaac Corp.
1. 35% of your score is attributed to how you pay your bills. Points are added for paying on time and deducted for late or missing payments. Note: This is a big portion of your score, so if you’re not paying bills on time, it’s best to get that under control pronto.
2. 30% of your score is based on your credit utilization ratio. Translation: How much money do you owe as a portion of the amount of credit available to you? The lower this ratio, the better.
3. 15% is based on the length of your credit history. When did you open your first account (and is it still open)?
4. 10% of your score goes to the type of credit you have. Think revolving credit (such as credit cards) and installment credit (such as car loans and mortgages).
5. The last 10% is impacted by new credit applications. How often and for what types of credit are you applying?
Questions about some local lenders that can help with credit or where to start? Feel free to contact me.
When preparing your home for buyers, staging is bigger than you may think, at least for the photos. Did you know 90% of buyer decide to look at a home from photos they have seen online? Check out my 6 top staging props.
I love seeing a glass bowl of lemons on a kitchen countertop or island. Whether you use a ceramic platter, a wooden bowl or a basket — the pretty effect is the same.
Think of lemons as the default dining room centerpiece, the perfect prop for completing a staged beverage bar of glassware, or the easiest way to dress up a foyer tabletop.
There are a couple reasons why I rate lemons high for home staging. One is that nobody is tempted to try and eat them the way they would apples or pears. They’re clearly decorative. The other reason is that lemons represent freshness. They’re tangy and fragrant, and even if you’re staging with fake lemons, the message is the same: clean and fresh.
The one thing that adds more life to a room is plants. Knowing where you want to stage with plants is the first and most essential step—and it’s not just about finding the best spots where plants can help your house sell.
Plants soften the room and allow you to add a little outdoors in. They also provide additional height to create vertical interest and great balance.
It is a simple and low cost decorative piece that can add the perfect cozy touch to make potential buyers feel at home! Knowing where to put plants before you buy is essential though. Palms, faux Fig trees and Grasses are my favorites to stage with. When picking out house plants for staging. I also love to use woven baskets as my planters.
I like to put plants in the home’s entryway, and on tables, like the kitchen and dining room tables, and bedside tables.
Also, if you have any awkward, empty spaces that you don’t know what to do with it, fill it with a taller plant in a good-sized pot to give the area purpose.
New towels are a must for dressing up a bath and this one of the cheapest and easiest staging props. Face it — towels age and although they work just fine for everyday use, when you’re aiming for that clean, comfy look, you want fat and fluffy new ones. I always suggest white ones unless the entire bathroom is white. White towels will always work in someone’s next home.
This prop might be a tad more difficult to locate and afford, but the results are dynamic. A landscape painting literally opens up a room. The most economical sources are the usual second-hand places we all love (eBay, thrift stores, garage sales), but you can also buy budget-friendly new artwork that works fine.
Your landscape could be a beach, forest, city, mountain or rural scene. Make it match the mood of the home — abstract watercolor you create yourself, one of your own photos blown up big and framed, a colorful travel poster, or a sophisticated black and white photograph.
Tour model houses and study photos of professionally designed rooms, you’ll notice how often the savvy decorators who plan these rooms use pairs of lamps.
Anytime a pair of anything is used as a decorating prop, there’s a sense of order and quality. Rooms done on a shoestring from castoffs lack the cohesiveness that twosomes add to a space.
Although you might be home staging on a shoestring, the last thing you want is to look like money’s a problem. Buyers’ perceptions of your financial situation will influence the purchase price they offer you. Write that down! Look wealthy. Look generous. Look comfortable. Don’t look needy or you’ll attract “bottom-feeders.”
A pair of table lamps in the bedroom or living room will help you pull off mismatched nightstands or side tables.
The lamps should be placed close enough so that they are both visible in a glance, such as on either side of a couch or bed. Their shades should match, and they should both be on the same level. Walk through the home to make sure you haven’t separated a matched pair of lamps, and then reunite them for staging.
Pillows are one of the absolute best ways to add another layer to a room’s decor.
I recommend pillows in colors that flow seamlessly with the color scheme of the room rather than oft-touted pops of color. You can still have fun with geometrics, textural fabrics, dressmaker details, and animal prints.
What to avoid: Cute sayings on pillows, pillows flattened by age, stiff pillows that don’t look comfortable, and an excess of pillows on any bed, sofa or chair.
If you make your pillow insert slightly larger than the pillow cover, you’ll have a nice, plump pillow. Pillows add the custom details that give a room some interest and make a room look finished. They also suggest hominess and comfort.
Staging props are key to creating a room that buyers can see themselves and their belongings in. Neutral, but attractive. A soft and comfortable feeling is the goal. Things to avoid according to the National Association of REALTORS
In a normal market, it’s good to have an experienced guide coaching you through the process of buying or selling a home. That person can advise you on important things like pricing your home correctly or the first steps to take when you’re ready to buy. However, what we’re in today is far from normal, it is an unprecedented real estate market. As a result, an expert isn’t just good to have by your side – an expert is essential.
Selling in South East Texas
Today’s housing market is full of extremes. Mortgage rates hovering near record-lows are driving high buyer demand. On the other hand, an absence of sellers is creating record-low housing inventory. This imbalance in supply and demand is leading to a skyrocketing rate of bidding wars and more houses selling over their asking price. This is driving home price appreciation and gains in home equity. These market conditions aren’t just extreme – they can be overwhelming. Having a trusted expert to coach you through the process of buying and selling a home gives you clarity, confidence, and success through each step.
A real estate agent can be your essential guide through this unprecedented real estate market, but truth be told, not all agents are created equal. A true expert can carefully walk you through the whole real estate process, look out for your unique needs, and advise you on the best ways to achieve success. Finding the right agent should be your top priority when you’re ready to buy or sell a home.
It starts with trust. You’ll have to be able to trust the advice your agent is going to give you, so make sure you’re connected to a true professional. An agent can’t give you perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in this unique market. A true professional expert can, however, give you the best possible advice based on the information and situation at hand, helping you make the necessary adjustments and best decisions along the way. The right agent – the professional – will help you plan the steps to take for success, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions toward your goals. That’s exactly what you want and deserve.
It’s crucial right now to work with a real estate expert who understands how the market is changing and what that means for home buyers and sellers. If you’re planning to make a move this year, let’s connect so you have someone who can answer your questions, give you the best advice, and guide you along the way. Keeping Current Matters
© 2022 Coldwell Banker Realty
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