Buyers

Today’s Home Price Appreciation Is Great News for Existing Homeowners

If you’re planning to sell your home this season, rising prices are great news for you. But it’s important to understand why prices are rising to begin with. One major factor is supply and demand.

In any industry, when there are more buyers for an item than there are of that item available, prices naturally rise. In those situations, buyers are willing to pay more to get the product or service they’re looking for when options are scarce. And that’s exactly what’s happening in the current real estate market.

Selma Hepp, Executive, Research & Insights and Deputy Chief Economist at CoreLogic, puts it like this:

With so few homes, buyers are once again left with fierce competition that’s driving the share of homes that sold over the listing price up to 66% . . . With the continued imbalance between supply and demand, home prices are likely to have another year of strong gains and are expected to average about 10% growth for the year.”

Because it will take some time for housing supply to increase, experts believe prices will continue rising. The latest Home Price Expectations Survey forecasts what will happen with home prices over the next 5 years. As the graph below shows, while the rate of appreciation will moderate over the next few years, prices will continue rising through 2026:

What This Means When You Sell Your House

If you’re a homeowner, the projection for continued price appreciation this year opens up an opportunity to move. That’s because it may give your equity a major boost. Equity is the difference between what you owe on your house and its market value. The amount of equity you have increases as you make your monthly payments and as rising home prices drive up the market value for your home.

Growing equity is a powerful tool for homeowners. When you sell your house, the equity you’ve built comes back to you in the sale. That money could be enough to cover some (if not all) of your down payment on your next home.

Of course, if you want to know how much equity you have in your current house, it’s crucial to work with a real estate professional. They follow current market trends and can help you understand your home’s value when you’re ready to sell.

What This Means for Your Next Purchase

But today’s rising home values aren’t just good news if you’re ready to sell. Because price appreciation is forecast to continue in the years ahead, you can rest assured your next home will be an investment that should grow in value with time. That’s one of several reasons why real estate has been rated the best investment in a recent Gallup poll.

Bottom Line

If you’re weighing whether or not you should sell your house this season, know rising home values may be opening up an opportunity to use equity to fuel your move. Let’s connect so you can find out how much your home is worth and to learn more about all the benefits you have in today’s market.

Your House Could Be Closer to List-Ready Than You Think

American traditional center hall colonial revival brick home with dormers.

One of the biggest concerns for a homeowner looking to sell is the time they’ll have to put in before listing their house. If that’s the case for you, you should know – your home might be closer to list-ready than you think in today’s housing market. A survey of recent sellers from realtor.com finds that many were able to get their house ready in less than a month. It says:

“With many homeowners expecting a quick sale, and in many cases a lack of contingencies, the preparation process took less than a month for over 50% of home sellers this past year, with 20% completing it in less than two weeks.

Those sellers expecting to sell quickly are following recent buyer trends. With mortgage rates and home prices rising, buyers in today’s market are serious about finding a home quickly. But with the limited number of homes for sale, there are very few options for those buyers to choose from. That means many may be willing to take on projects after they purchase.

Because of this, you may be able to focus on less time-consuming tasks before putting your house on the market. According to the survey mentioned above, some of the top things recent sellers completed before listing over the past year include landscaping, making minor cosmetic updates, and touching-up paint (see image below):

A Real Estate Advisor Will Help Streamline the Process and Keep You Focused

Of course, each situation is different, and knowing what repairs or updates your house needs to stand out in your local area is critical. That’s where a trusted real estate professional comes in. In a recent article, NextAdvisor explains:

“. . . Real estate can be hyper-local, and demand can vary from one neighborhood to the next. It’s a good idea to work with a local real estate professional to determine an ideal listing price and if any improvements or repairs need to be completed before putting your home on the market.”

Your trusted real estate advisor knows the ins and outs of the market in your specific area. They’ll help you identify the places where you should and shouldn’t spend your time and money – and that can enable you to list quickly.

Bottom Line

If you’re ready to take advantage of the incredible conditions for sellers in today’s real estate market but are worried about the time it’ll take to get your home ready, you might be closer than you think. Let’s connect so you can see what you need to do before listing your house today.

Is the Housing Market Correcting?

Wood House Model with Question marks, House concept

If you’re following the news, all of the headlines about conditions in the current housing market may leave you with more questions than answers. Is the boom over? Is the market crashing or correcting? Here’s what you need to know.

The housing market is moderating compared to the last two years, but what everyone needs to remember is that the past two years were record-breaking in nearly every way. Record-low mortgage rates and millennials reaching peak homebuying years led to an influx of buyer demand. At the same time, there weren’t enough homes available to purchase thanks to many years of underbuilding and sellers who held off on listing their homes due to the health crisis.

This combination led to record-high demand and record-low supply, and that wasn’t going to be sustainable for the long term. The latest data shows early signs of a shift back to the market pace seen in the years leading up to the pandemic – not a crash nor a correction. As realtor.com says:

The housing market is at a turning point. . . . We’re starting to see signs of a new direction, . . .”

Home Showings Then and Now

The ShowingTime Showing Index tracks the traffic of home showings according to agents and brokers. It’s a good indication of buyer demand. Here’s a look at that data going back to 2019 (see graph below):

The 2019 numbers give a good baseline of pre-pandemic demand (shown in gray). As the graph indicates, home showings skyrocketed during the pandemic (shown in blue). And while current buyer demand has begun to moderate slightly based on the latest data (shown in green), showings are still above 2019 levels.

And since 2019 was such a strong year for the housing market, this helps show that the market isn’t crashing – it’s just at a turning point that’s moving back toward more pre-pandemic levels.

Existing Home Sales Then and Now

Headlines are also talking about how existing home sales are declining, but perspective matters. Here’s a look at existing home sales going all the way back to 2019 using data from the National Association of Realtors (NAR) (see graph below):

Again, a similar story emerges. The pandemic numbers (shown in blue) beat the more typical year of 2019 home sales (shown in gray). And according to the latest projections for 2022 (shown in green), the market is on pace to close this year with more home sales than 2019 as well.

It’s important to compare today not to the abnormal pandemic years, but to the most recent normal year to show the current housing market is still strong. First American sums it up like this:

“. . . today’s housing market looks a lot like the 2019 housing market, which was the strongest housing market in a decade at the time.”

Bottom Line

If recent headlines are generating any concerns, look at a more typical year for perspective. The current market is not a crash or correction. It’s just a turning point toward more typical, pre-pandemic levels. Let’s connect if you have any questions about our local market and what it means for you when you buy or sell this year.

More Americans Choose Real Estate as the Best Investment Than Ever Before

This image is shot using a drone.

Americans’ opinion on the value of real estate as an investment is climbing. That’s according to an annual survey from Gallup. Not only is real estate viewed as the best investment for the ninth year in a row, but more Americans selected it than ever before.

The graph below shows the results of the survey since Gallup began asking the question in 2011. As the trend lines indicate, real estate has been gaining ground as the clear favorite for almost a decade now:

If you’re thinking about purchasing a home, let this poll reassure you. Even when inflation is high like today, Americans recognize owning a home is a powerful financial decision.

How an Investment in Real Estate Can Benefit You During High Inflation

Because inflation reached its highest level in 40 years recently, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board, and that includes goods, services, housing costs, and more. When you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increases on one of your biggest budgetary items each month.

If you’re a renter, you don’t have that same benefit, and you aren’t protected from these increases, especially as rents rise. As Danielle Hale, Chief Economist at realtor.com, notes:

“Rising rents, which continue to climb at double-digit pace . . . and the prospect of locking in a monthly housing cost in a market with widespread inflation are motivating today’s first-time homebuyers.”

When Inflation Has Risen in the Past, Home Prices Have Too

Your house is also an asset that typically increases in value over time, even during inflation. That‘s because as prices rise, the value of your home does too. Mark Cussen, Financial Writer for Investopedia, puts it like this:

“There are many advantages to investing in real estate. . . . It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because as inflation rises, so do property values. . . .”

And since rising home values help increase your equity, and by extension your net worth, homeownership is historically a good hedge against inflation.

Bottom Line

Buying a home is a powerful decision. It’s no wonder why so many people view it as the best long-term investment, even when inflation is high. When you buy, you help shield yourself from increases in your housing costs and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.

Will Home Prices Fall This Year? Here’s What Experts Say.

Many people are wondering: will home prices fall this year? Whether you’re a potential homebuyerseller, or both, the answer to this question matters for you. Let’s break down what’s happening with home prices, where experts say they’re headed, and how this impacts your homeownership goals.

What’s Happening with Home Prices? 

Home prices have seen 121 consecutive months of year-over-year increases. CoreLogic says:

Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”

So why are prices climbing so much? It’s because there are more buyers than there are homes for sale. This imbalance is expected to maintain that upward pressure on home prices because homes for sale are a hot commodity in today’s low-inventory housing market.

Where Do Experts Say Prices Will Go from Here?

Experts say the housing market isn’t set up for a price decline due to that ongoing imbalance between supply and demand. In the latest home price forecasts for 2022, they’re calling for ongoing appreciation throughout the year (see graph below):

While the experts are forecasting more moderate price appreciation, the 2022 projections show price gains will remain strong throughout this year. First American explains it like this:

While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”

What Does That Mean for You?

The biggest takeaway is that none of the experts are projecting depreciation. If you’re a homeowner thinking about selling, the higher price appreciation over the last two years has been great for your home’s value, but it’s also something you should factor in when planning your next steps. If you’ll also be buying a home after selling your current house, you shouldn’t wait for prices to fall. Waiting will only cost you more in the long run because climbing mortgage rates and rising home prices will have an impact on your next home purchase. Freddie Mac says:

“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”

Bottom Line

If you’re thinking of selling to move up, you shouldn’t wait for prices to fall. Experts say prices will continue to appreciate this year. That means, if you’re ready, buying your next home before prices climb further may make the most financial sense. Let’s connect to begin the process of selling your current home and looking for your next one before prices rise higher.

Are There More Homes Coming to the Market?

Old circa 1750 Canadiana style fieldstone house facade with brown stained wooden windows, door and Tulipa – Tulips in front yard in spring, Quebec, Canada. This image is property released. CUPR0314

According to a recent survey from the National Association of Realtors (NAR), one of the top challenges buyers face in today’s housing market is finding a home that meets their needs. That’s largely because the inventory of homes for sale is so low today.

If you’re looking to buy a home, you may have noticed this yourself. But there is good news. Recent data shows more sellers are listing their houses this season, which may give you more options for your home search.

Early Signs Inventory May Be Growing

The latest data from realtor.com shows the number of listings coming onto the market, known in the industry as “new listings,” has increased since the start of the year (see graph below):

This indicates more sellers are listing their homes for sale each month this year. And according to realtor.com, this growth is expected to continue. Their research finds the majority of potential sellers plan to list their homes over the next six months. Realtor.com says:

“. . . markets may see a noticeable bump in the number of homes for sale as we move through spring and into summer. A majority of homeowners planning to sell this year indicated that they aim to list in the next six months, with almost 10% having already placed their properties on the market.”

Homes Are Still Selling Quickly

But while new listings are increasing, it’s important to know they’re also selling quickly. The latest Realtors Confidence Index from NAR shows the median days on market for recently sold homes since the beginning of the year (see chart below). The time on market has decreased month-over-month. That means homes are selling even faster than they did the previous month.

What That Means for You

While a low-inventory market is difficult to navigate as a buyer, there is hope. The growing number of new listings and the expectation more sellers will list their homes in the coming months is great news if you’ve had a hard time finding a home that fits your needs. Just remember, those new listings are going fast. That means you’ll want to keep your foot on the gas and be ready to act if you find a home you love this season.

Your agent can help you stay on top of the latest listings in your area so you can find the home that’s right for you and submit your strongest offer as quickly as possible.

Bottom Line

If you’ve been having a hard time finding your dream home, stick with your search. More options are coming to market and your ideal home could be one of them. Let’s connect so you can stay up to date on the latest listings in our market, so you can be ready to move fast when you find the one that’s right for you.

What You Actually Need To Know About the Number of Foreclosures in Today’s Housing Market

While you may have seen recent stories about the volume of foreclosures today, context is important. During the pandemic, many homeowners were able to pause their mortgage payments using the forbearance program. The goal was to help homeowners financially during the uncertainty created by the health crisis.

When the forbearance program began, many experts were concerned it would result in a wave of foreclosures coming to the market, as there was after the housing crash in 2008. Here’s a look at why the number of foreclosures we’re seeing today is nothing like the last time.

1. There Are Fewer Homeowners in Trouble

Today’s data shows that most homeowners are exiting their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again. The graph below depicts those findings from the Mortgage Bankers Association (MBA):

The same MBA report mentioned above estimates there are approximately 525,000 homeowners who remain in forbearance today. Thankfully, those people still have the chance to work out a suitable repayment plan with the servicing company that represents their lender.

2. Most Homeowners Have Enough Equity To Sell Their Homes

For those who are exiting the forbearance program without a plan in place, many will have enough equity to sell their homes instead of facing foreclosures. Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home.

Marina Walsh, CMB, Vice President of Industry Analysis at MBA, says:

“Given the nation’s limited housing inventory and the variety of home retention and foreclosure alternatives on the table across various loan types, . . . Borrowers have more choices today to either stay in their homes or sell without resorting to a foreclosure.”

3. There Have Been Fewer Foreclosures over the Last Two Years

One of the seldom-reported benefits of the forbearance program was it gave homeowners facing difficulties an extra two years to get their finances in order and work out a plan with their lender. That helped prevent the foreclosures that normally would have come to the market had the new forbearance program not been available.

Even as people leave the forbearance program, there are still fewer foreclosures happening today than before the pandemic. That means, while there are more foreclosures now compared to last year (when foreclosures were paused), the number is still well below what the housing market has seen in a more typical year, like 2017-2019 (see graph below):

4. The Current Market Can Easily Absorb New Listings

When the foreclosures in 2008 hit the market, they added to the oversupply of houses that were already for sale. It’s exactly the opposite today. The latest Existing Home Sales Report from the National Association of Realtors (NAR) reveals:

“Total housing inventory at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from one year ago (1.05 million). Unsold inventory sits at a 2.0-month supply at the present sales pace, up from 1.7 months in February and down from 2.1 months in March 2021.”

A balanced market would have approximately a six-month supply of inventory. At 2.0 months, today’s housing market is severely understocked. Even if one million homes enter the market, there still won’t be enough inventory to meet the current demand.

Bottom Line

If you see headlines about the increasing number of foreclosures today, remember context is important. While it’s true the number of foreclosures is higher now than it was last year, foreclosures are still well below pre-pandemic years.

If you have questions, let’s connect to talk through the latest market conditions and what they mean for you.

Should You Update Your House Before Selling? Ask a Real Estate Professional.

Some Highlights

  • If you’re deciding whether you should make updates before you sell your house, lean on your trusted real estate advisor to be your guide.
  • In today’s sellers’ market, buyers have limited options and may be more willing to take on repairs themselves.
  • If you’re thinking about selling your house, let’s connect so you have expert advice that’s customized to your home and our local area.

If You’re a Homeowner, You Have Incredible Leverage When You Sell Today

Smiling woman giving high five to her friend after exercising. Woman looking happy after a successful workout session outdoors.

In today’s housing market, homeowners have a great opportunity to sell their house and receive the best terms for their personal situation. That’s because there’s a limited number of homes for sale, which is creating competition among buyers. Right now, homebuyers want three things:

These buyer needs give you an amazing advantage – also known as leverage – when you sell.

What Does This Mean for Sellers Today?

You might already realize this enables you to sell at a good price, but you’re also in a great position to get the best terms to suit your needs.

According to the latest Realtors Confidence Index from the National Association of Realtors (NAR), the average home sold is receiving 4.8 offers. That’s why there’s a good chance you’ll get offers from multiple buyers who are willing to compete for your house. When you do, you should look closely at the terms of each offer to find out which one has the best options for you.

And if you have questions at any point in the process, remember your trusted real estate advisor can help. They’re experts who understand the fine print, know how to compare the terms of various offers, and will help you select the best one for your situation.

Bottom Line

If you’re thinking of selling your home, know buyer demand in today’s market gives you a great opportunity to get the best terms and price when you sell your house. Let’s connect today to discuss how much leverage you have as a seller in today’s market.

Why Rising Mortgage Rates Push Buyers off the Fence

A Walk Around Downtown Orange

If you’re thinking about buying a home, you’ve probably heard mortgage rates are rising and have wondered what that means for you. Since mortgage rates have increased over two percentage points this year, it’s natural to think about how this will impact your homeownership plans.

Today, buyers are reacting in one of two ways: they’re either making the decision to buy now before rates climb higher or they’re waiting it out in hopes rates will fall. Let’s look at some context that can help you understand why so many buyers are jumping off the fence and into action rather than waiting to buy.

A Look Back: How the Current Mortgage Rate Compares to Historical Data

One factor that could help you make your decision to buy now is how today’s mortgage rates compare to historical data. While higher than the average 30-year fixed rate in recent years, the latest rates are still comparatively low when you look at the bigger picture of where rates have been since 1971 (see graph below):

Mark Fleming, Chief Economist at First Americanexplains it like this:

“. . . historical context is important. An average 30-year, fixed mortgage rate of 5.5 percent is still well below the historical average of nearly 8 percent.”

If you’re deciding whether to buy now or wait, this is important context to have. Today’s mortgage rate still gives you a window of opportunity to lock in a rate that’s comparatively lower than decades past.

A Look Ahead: What Happens if Rates Climb Further

The buyers who are springing into action now are also motivated to make their move because they know rates have risen steadily this year, and they’re eager to get ahead of any further increases.

Why? When mortgage rates climb, they impact the monthly mortgage payment you’ll have on the home you’re buying. Basically, it’ll likely cost you more to buy a home if you wait. Experts say mortgage rates will rise (although more moderately) in the months ahead. Odeta Kushi, Deputy Chief Economist at First Americanexplains:

“. . . ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”

So, if you’re ready and financially able to buy now, it may make more sense to get off the fence and make your purchase sooner rather than later. As Nadia Evangelou, Senior Economist at the National Association of Realtors (NAR), says:

With even higher interest rates on the horizon, I don’t see any reason to hold off from purchasing a home right now. If you feel financially secure, you should start looking for a home.”

At the end of the day, there is no perfect advice on when to buy a home. What you should do depends on your goals, your finances, and your personal situation. Use this information with the help of local real estate professionals to make an informed decision on what’s best for you. The Mortgage Reports sums it up best:

“. . . if you’re on the fence about whether to buy now or wait for a better deal, buying sooner rather than later might be wise. That said, home buying is always a personal decision. Whether you should buy in 2022 depends on your financial situation and the local housing market where you live.”

Bottom Line

For many buyers, rising mortgage rates are motivating them to act now and make a purchase before rates rise higher. To decide what move is best for you, let’s connect so you have expert advice on your side.