Sellers have a great opportunity this season as buyer demand still heavily outweighs the current supply of homes for sale. According to the National Association of Realtors (NAR), today’s housing inventory sits at only a 2.6-month supply. To put that into perspective, a neutral market typically features a 6-month supply. That places today’s market firmly in the sellers’ market category.
That same NAR data also shows today’s inventory of single-family homes is trailing behind the level we saw last year (see graph below):Because of the ongoing supply challenges, buyers can feel like they’re wandering across a vast, empty desert when searching for their next home. That means your house could provide an oasis for buyers thirsty for options – and it could increase the chances of buyers entering a bidding war for your home.
The latest Realtors Confidence Index Survey from NAR shows houses are receiving an average of 3.8 offers. A multiple-offer scenario lets you select the best offer and gives you incredible leverage when you sell this fall.
Bottom Line
Buyers today are looking for relief as they wander today’s inventory desert. Listing your house this fall – before more options appear – gives your house the best chance to be noticed by multiple buyers. Let’s connect today so your house can stand out as the oasis it truly is.
As you follow the news, you’re likely seeing headlines discussing what’s going on in today’s housing market. Chances are high that some of the more recent storylines you’ve come across mention terms like cooling or slowing when talking about where the market is headed.
But what do these terms mean? The housing market today is anything but normal, and it’s still an incredibly strong sellers’ market, especially when compared to the few years leading up to the pandemic. With that in mind, what can previous years tell us about today’s real estate market and if it’s truly slowing?
We’re Still Seeing an Above Average Number of Sales
You may see headlines about a drop in home sales. But are those headlines telling the full story? The most recent Existing Home Sales Report from the National Association of Realtors (NAR) does show a drop of about 2% from July to August. But the month-over-month decline doesn’t provide the full picture (see graph below):As the graph shows, historical context is key. Today’s home sales are well ahead of some of the more normal years that led up to the health crisis. That means buyers are still in the market, which is great news if you’re planning to list your home.
Houses Are Selling Faster Than Usual
When headlines mention the market is slowing, sellers may naturally wonder if their house will sell as quickly as they’d like. According to the most recent Realtors Confidence Index from NAR, homes are still selling at recordspeed(see graph below):Again, if we look back at data from previous years, we can see the average time on market – 17 days – means homes are selling faster than a normal pace.
Bidding Wars Are Still the Norm
The Realtors Confidence Index from NAR also shows a drop in the average number of offers homes are receiving in August, and many headlines may simply focus there without providing the important context (see graph below):Again, it’s important to compare today’s market to trends from recent years. Currently, the average number ofoffers per listing is higher than 39 of the previous 45 months. That means the likelihood of a bidding war on your home is still high. And the number of offers your house receives can have a major influence on the final sale price.
So, Is the Market Slowing Down?
While there are slight declines in various month-to-month data, it’s important to keep historical context in mind when determining what’s happening in today’s market. Odeta Kushi, Deputy Chief Economist at First American, put it best recently, saying:
“It’s not the white-hot market from earlier in the year & it’s not the 2020 market benefiting from a wave of pent-up demand but make no mistake this is still a hot housing market.”
Bottom Line
Don’t let headlines make you rethink listing your home this fall. Selling today means you can still take advantage of high buyer demand, multiple offers, and a quick sale. If you’re thinking of selling your house, let’s connect and discuss why this fall is the perfect time to do so.
The last 18 months changed what many buyers are looking for in a home. Recently, the American Institute of Architects released their AIA Home Design Trends Survey results for Q3 2021. The survey reveals the following:
70% of respondents want more outdoor living space
69% of respondents want a home office (48% wanted multiple offices)
46% of respondents want a multi-function room/flexible space
42% of respondents want an au pair/in-law suite
39% of respondents want an exercise room/yoga space
If you’re a homeowner who wants to add any of the above, you have two options: renovate your current house or buy a home that already has the spaces you desire. The decision you make could be determined by factors like:
A possible desire to relocate
The difference in the cost of a renovation versus a purchase
Finding an existing home or designing a new home that has exactly what you want (versus trying to restructure the layout of your current house)
In either case, you’ll need access to capital: the funds for the renovation or the down payment your next home would require. The great news is that the money you need probably already exists in your current home in the form of equity.
Home Equity Is Skyrocketing
The record-setting increases in home prices over the last two years dramatically improved homeowners’ equity. The graph below uses data from CoreLogic to show the average home equity gain in the first quarter of the last nine years:Odeta Kushi, Deputy Chief Economist at First American,quantifies the amount of equity homeowners gained recently:
“Remember U.S. households own nearly $35 trillion in owner-occupied real estate, just over $11 trillion in debt, and the remaining ~$24 trillion in equity. In inflation adjusted terms, homeowners in Q2 had an average of $280,000 in equity- a historic high.”
As a homeowner, the money you need to purchase the perfect home or renovate your current house may be right at your fingertips. However, waiting to make your decision may increase the cost of tapping that equity.
If you decide to renovate, you’ll need to refinance (or take out an equity loan) to access the equity. If you decide to move instead and use your equity as a down payment, you’ll still need to mortgage the remaining difference between the down payment and the cost of your next home.
Mortgage rates are forecast to increase over the next year. Waiting to leverage your equity will probably mean you’ll pay more to do so. According to the latest data from the Federal Housing Finance Agency (FHFA), almost 57% of current mortgage holders have a mortgage rate of 4% or below. If you’re one of those homeowners, you can keep your mortgage rate under 4% by doing it now. If you’re one of the 43% of homeowners with a mortgage rate over 4%, you may be able to do a cash-out refinance or buy a more expensive home without significantly increasing your monthly payment.
First Step: Determine the Amount of Equity in Your Home
If you’re ready to either redesign your current house or find an existing or newly constructed home that has everything you want, the first thing you need to do is determine how much equity you have in your current home. To do that, you’ll need two things:
The current mortgage balance on your home
The current value of your home
You can probably find the mortgage balance on your monthly mortgage statement. To find the current market value of your house, you can pay several hundreds of dollars for an appraisal, or you can contact a local real estate professional who will be able to present to you, at no charge, a professional equity assessment report.
Bottom Line
If the past 18 months have refocused your thoughts on what you want from your house, now may be the time to either renovate or make a move to the perfect home.
The HousingCoach℠ Approach to Home Seller Services is very systematic. There are lots of moving parts in a home sale and even more moving parts if there is a home purchase to be orchestrated as part of this transition. There are both practical and emotional components that need to be identified and planned for in order to have the most successful upgrade or downgrade transition.
All of our services start with a quick 15 – 30 minute coaching call which is a basic introductory consultation. On that call you take out your dream paint brush and start painting a picture of what the next phase or your American Dream looks like and I will ask you some specific questions about your plans, circumstances, and qualifications. If we both decide at the end of that call that we should move to the next stage, we will schedule your Comprehensive Home Seller Consultation.
As your HousingCoach℠ I will help you to develop and solid home sales game plan which will incorporate your current circumstances and your plans, goals, and dreams for the next 5, 10, or even 20 or more years into the future. In the Comprehensive Home Seller Consultation we will dive into Home Sale Profits, the Transactional Costs, and financial realities of the transition from your current house to your next home.
Once we decide to work together I will help you to:
Build out your Home Selling Game Plan;
Assemble your Home Selling (and if applicable, your Home Buying )Real Estate Team;
Customize and implement Your Comprehensive HousingCoach Marketing Plan;
Coordinate Home Showing Activity;
Procure Buyer Feedback;
Track and communicate all pertinent market activity to you during the sales process;
Make appropriate recommendations on any plan or pricing changes the market dictates;
Actively invite offers from all buyers through their agents;
Analyze all offers and buyer qualifications as they come in;
Develop, with you, a negotiation strategy for each and every offer;
Negotiate on your behalf to get the best possible deal;
Coordinate all of the transaction requirements and activities until the deal is closed.
If we work together I can promise you that we will have some laughs along the way without losing sight of the fact that Home Selling is serious business. It should be done only after the research is done, all aspects of your sale have been planned out, you have a well crafted strategy to transition to your destination, and have assembled an experienced team of real estate professionals to help you on both ends.
Today’s strong sellers’ market is the direct result of high demand and low supply.
Low mortgage rates and generational trends have created an increased demand for homes. Meanwhile, the slower pace of new home construction and homeowners staying in their homes longer have both led to today’s low supply.
If you’re thinking of selling, let’s connect to talk about our local area and how you can take advantage of today’s housing market.
Even in a hot sellers’ market like today’s in which homes are selling so quickly, it’s still important to make a good first impression on potential buyers. Taking the time upfront to prep your house appropriately can bring in the greatest return on your investment.
Here are four simple tips to make sure you maximize the sale of your house this fall.
1. Price It Right
One of the first things buyers will notice is the price of your house. That’s why it’s important to price it right. Your goal in pricing your house is to draw attention from competing buyers and let bidding wars push the final sales price up. Pricing your house too high to begin with could put you at a disadvantage by discouraging buyers from making an offer.
Your trusted real estate advisor can help you find the price for your home that reflects the current market value. Lean on your agent to help you with this crucial first step.
2. Keep It Clean
It may sound simple, but keeping your house clean is key to making sure it gets the attention it deserves. As realtor.com says in the Home Selling Checklist:
“When selling your home, it’s important to keep everything tidy for buyers. . . . Remember to take special care with the bathroom, making sure the tile, counters, shower, and floors shine.”
Before each buyer visits, assess your space and determine what needs your attention. Wash the dishes, make the beds, and put away any toys. Doing these simple things can reduce any potential distractions for buyers.
3. Make It Easy To Visit
Giving buyers the opportunity to see your house on their schedule can be a true game-changer. Buyers are less likely to make an offer if it’s difficult to plan a tour or they can’t easily fit it into their schedule. Making your house available as often as possible helps create opportunities for more buyers to fall in love with your house.
Rest assured your trusted real estate advisor will keep your health and safety top of mind when buyers tour your home. Agents use the latest guidance to stay up to date on any protocols and sanitization recommendations.
4. Help Buyers Feel at Home
Finally, it’s important for buyers to see all the possible ways they can make your house their next home. As the realtor.com article puts it:
“The goal is to create a blank canvas on which buyers can project their own visions of living there, and loving it.”
An easy first step to create this blank canvas is removing personal items – pictures, awards, and sentimental belongings – from your space. If you’re unsure what should be packed away and what can stay, consult your trusted real estate advisor. Spending the time on this step can pay off in the long run, as the 2021 Profile of Home Staging from the National Association of Realtors notes:
“Eighteen percent of sellers’ agents said home staging increased the dollar value of a residence between 6% and 10%.”
Bottom Line
To make the most of today’s sellers’ market, avoid the temptation to skip over the essential preparation steps. Let’s connect today to discuss all the ways you can maximize your home sale.
Because of the ongoing supply challenges, buyers can feel like they’re wandering across a vast, empty desert when searching for their next home. That means your house could provide an oasis for buyers thirsty for options – and it could increase the chances of buyers entering a bidding war for your home.
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