Liz Warren
Displaying blog entries 341-350 of 1878
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Like most industries, residential real estate has a seasonality to it. For example, toy stores sell more toys in October, November, and December than they do in any other three-month span throughout the year. More cars are sold in the U.S. during the second quarter (April, May, and June) than in any other quarter of the year.
Real estate is very similar. The number of homes sold in the spring is almost always much greater than at any other time of the year. It’s even labeled as the spring buying season. Historically, the number of buyers and listings for sale significantly increase in the spring and remains strong throughout the summer. Once fall sets in, the number of buyers and sellers typically drops off.
Last year, however, that seasonality didn’t happen. The outbreak of the virus and subsequent slowing of the economy limited sales during the spring market. These sales were pushed back later in the year, and last fall and winter saw a dramatic increase in home sales over previous years. The only thing that held the market back was the extremely limited supply of homes for sale.
Some experts thought we’d return to the industry’s normal seasonality this winter with both the number of purchasers and houses available for sale falling off. However, data now shows that neither of those situations will likely occur. Buyer demand is still extremely strong, and it appears we may soon see a somewhat uncharacteristic increase in the number of homes coming to the market.
The latest Showing Index from ShowingTime, which tracks the average number of monthly showings on available homes, indicates buyer activity was slightly lower than at the same time last year but much higher than any of the three previous years (see chart below):
A report from realtor.com confirms buying activity remains strong in the existing home sales market:
“New housing data shows 2021's feverish home sales pace broke a yearly record in October, . . . with last month marking the eighth straight month of buyers snatching up homes more quickly than the fastest pace in previous years. . . .”
Buyer activity for newly constructed homes is also very strong. Ali Wolf, Chief Economist for Zonda, recently reported that Stuart Miller, the Executive Chairman of Lennar, one of the nation’s largest home builders, said this about demand:
“There is still a great deal of demand at our sales centers with people lining up and not enough supply.”
The only question heading into this winter is whether the number of listings available could come close to meeting this buyer demand. We may have just received the answer to that question.
Instead of waiting for the normal spring buying market, new research indicates that homeowners thinking about selling are about to put their homes on the market this winter.
Speaking to the release of a report on this recent research, George Ratiu, Manager of Economic Research for realtor.com, said:
“The pandemic has delayed plans for many Americans, and homeowners looking to move on to the next stage of life are no exception. Recent survey data suggests the majority of prospective sellers are actively preparing to enter the market this winter.”
Here are some highlights in the report:
Of homeowners planning to enter the market in the next year:
The report also discusses the reasons sellers want to move:
Data shows buyer demand remains unusually strong going into this winter. Research indicates the supply of inventory is about to increase. This could be a winter real estate market like never before. Mt. Hood buyers are waiting patiently for the next new listing. We currently have ten properties for sale in the Mt. Hood Village area. Only two are under $500,000.
If you’re thinking of buying or selling, now is the time to have a heart-to-heart conversation with a real estate professional in your market, as things are about to change in an unexpected way.
As a renter, you’re constantly faced with the same dilemma: keep renting for another year or purchase a home? Your answer depends on your current situation and future plans, but there are a number of benefits to homeownership every renter needs to consider.
Here are a few things you should think about before you settle on renting for another year.
Rent increasing each year isn’t new. Looking back at Census data confirms rental prices have gone up consistently for decades (see graph below):
If you’re a renter, you’re faced with payments that continue to climb each year. Realtor.com recently shared the September Rental Report, and it shows price increases accelerating from August to September (see graph below):
As the graph shows, rents are still on the rise. It’s important to keep this in mind when the time comes for you to sign a new lease, as your monthly rental payment may increase substantially when you do.
One of the most significant advantages of buying a home is the wealth you build through equity. This year alone, homeowners gained a substantial amount of equity, which, in turn, grew their net worth. As a renter, you miss out on this wealth-building tool that can be used to fund your retirement, buy a bigger home, downsize, or even achieve personal goals like paying for an education or starting a new business.
This is a big decision-making point if you want to be able to paint, renovate, and make home upgrades. In many cases, your property owner determines these selections and prefers you don’t alter them as a renter. As a homeowner, you have the freedom to decorate and personalize your home to truly make it your own.
You may choose to rent because you feel it provides greater flexibility if you need to move for any reason. While it’s true that selling a home may take more time than finding a new rental, it’s important to note how quickly houses are selling in today’s market. According to the National Association of Realtors (NAR), the average home is only on the market for 17 days. That means you may have more flexibility than you think if you need to relocate as a homeowner.
If you are a renter in the Mt. Hood area, you know there are none! If there are, you are paying a pretty price for your rental. Deciding if it’s the right time for you to buy is a personal decision, and the timing is different for everyone. However, if you’d like to learn more about the benefits of homeownership, let’s connect so you can make a confident, informed decision and have a trusted advisor along the way.
Many people have questions about home prices right now. How much have prices risen over the past 12 months? What’s happening with home values right now? What’s projected for next year? Here’s a look at the answers to all three of these questions.
According to the latest Home Price Index from CoreLogic, home values have increased by 18.1% compared to this time last year. Additionally, prices have gone up at an accelerated pace for each of the last eight months (see graph below):
The increase in the rate of appreciation that’s shown by CoreLogic coincides with data from the other two main home price indices: the FHFA Home Price Index and the S&P Case Shiller Index.
The last year has shown tremendous home price appreciation, which is resulting in a major gain in wealth for homeowners through rising equity.
All three indices mentioned above also show that while appreciation is in the high double digits right now, that price acceleration is beginning to level off (see graph below):
Year-over-year appreciation is still close to 20%, but it’s clearly plateauing at that rate. Many experts believe it will drop below 15% by the end of the year.
Keep in mind, that doesn’t mean home values will depreciate. It means the rate of appreciation will slow, yet stay well above the 25-year average of 5.1%.
Mt. Hood numbers for October from RMLS multiple listing shows 30.7% change in home prices from the prior year. The average sale price last month was $534,600! Nearly every home that hits the market has an amazing number of multiple offers. Things don't appear to be letting up and with even less inventory they should continue to escalate into 2022.
The recent surge in prices is the result of heavy buyer demand and a shortage of homes available for sale. Most experts believe that as more housing inventory comes to market (both new construction and existing homes), the supply and demand for housing will come more into balance. That balance will bring a lower rate of appreciation in 2022. Here’s a look at home price forecasts from six major entities, and they all project future appreciation:
While the projected rate of appreciation varies among the experts, due to things like supply chain challenges, virus variants, and more, it’s clear that home values will continue to appreciate next year.
There have been historic levels of home price appreciation over the last year. That pace will slow as we finish 2021 and enter into 2022. Prices will still rise in value, just at a much more moderate pace, which is good news for the housing market.
With the average 30-year fixed mortgage rate from Freddie Mac climbing above 3%, rising rates are one of the topics dominating the discussion in the housing market today. And since experts project rates will rise further in the coming months, that conversation isn’t going away any time soon.
But as a homebuyer, what do rates above 3% really mean?
Buyers don’t want mortgage rates to rise, as any upward movement increases your monthly mortgage payment. But it’s important to put today’s average mortgage rate into perspective. The graph below shows today’s rate in comparison to average rates over the last five years:
As the graph shows, even though today’s rate is above 3%, it’s still incredibly competitive.
But today’s rate isn’t just low when compared to the most recent years. To truly put today into perspective, let’s look at the last 50 years (see graph below):
When we look back even further, we can see that today’s rate is truly outstanding by comparison.
Being upset that you missed out on sub-3% mortgage rates is understandable. But it’s important to realize, buying now still makes sense as experts project rates will continue to rise. And as rates rise, it will cost more to purchase a home.
As Mark Fleming, Chief Economist at First American, explains:
“Rising mortgage rates, all else equal, will diminish house-buying power, meaning it will cost more per month for a borrower to buy ‘their same home.’”
In other words, the longer you wait, the more it will cost you.
While it’s true today’s average mortgage rate is higher than just a few months ago, 3% mortgage rates shouldn’t deter you from your home buying goals. Historically, today’s rate is still low. And since rates are expected to continue rising, buying now could save you money in the long run. Let’s connect so you can lock in a great rate now.
Opportunity knocks! This one level two bedroom home sits on nearly a third of an acre in Rhododendron. It's only one block to the Zig Zag River and twenty minutes to the slopes of Mt. Hood. The Mt. Hood National Forest is nearby and it's a short walk to Skyway for some awesome live music and killer barbeque!
Just under 900 square feet of living space, the home features a propane fireplace, vaulted ceilings, open floor plan, decks and your own forest! Super affordable for the mountain at $375,000! Sold as is!
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Buyers in today’s market often have questions about the importance of getting a home appraisal and an inspection. That’s because high buyer demand and low housing supply are driving intense competition and leading some buyers to consider waiving those contingencies to stand out in the crowded market.
But is that the best move? Buying a home is one of the most important transactions in your lifetime, and it’s critical to keep your best interests in mind. Here’s a breakdown of what to expect from the appraisal and the inspection, and why each one can potentially save you a lot of time, money, and headaches down the road.
The home appraisal is a critical step for securing a mortgage on your home. As Home Light explains:
“. . . lenders typically require an appraisal to ensure that your loan-to-value ratio falls within their underwriting guidelines. Mortgages are secured loans where the lender uses your home as collateral in case you default on the agreed-upon payments.”
Put simply: when you apply for a mortgage, an unbiased appraisal – typically required by your lender – is the best way to verify the value of the home. That appraisal ensures the lender doesn’t loan you more than what the home is worth.
When buyers are competing like they are today, bidding wars and market conditions can push prices up. A buyer’s contract price may end up higher than the value of the home – this is known as an appraisal gap. In today’s market, it’s common for the seller to ask the buyer to make up the difference when an appraisal gap occurs. That means, as a buyer, you may need to be prepared to bring extra money to the table if you really want the home.
Like the appraisal, the inspection is important because it gives an impartial evaluation of the home. While the appraisal determines the current value of the home, the inspection determines the current condition of the home. As the American Society of Home Inspectors puts it:
“Home inspections are the opportunity to discover major defects that were not apparent at a buyer’s showing. . . . Your home inspection is to help you make an informed decision about the house, including its condition.”
If there are any concerns during the inspection – an aging roof, a malfunctioning HVAC system, or any other questionable items – you have the option to discuss and negotiate any potential issues with the seller. Your real estate advisor can help you navigate this process and negotiate what, if any, repairs need to be made before the sale is finalized.
Keep in mind – home inspections are critical because they can shed light on challenges you may face as the new homeowner. Without an inspection, serious, sometimes costly issues could come as a surprise later on.
Both the appraisal and the inspection are important steps in the home buying process. They protect your best interests as a buyer by providing unbiased information about the home’s value and condition. Let’s connect so you have an expert guiding you throughout the entire process.
Displaying blog entries 341-350 of 1878
