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  • Housing Market To “Spring Forward” This Year | Simplifying The Market

    Housing Market To “Spring Forward” This Year

    Just like our clocks this weekend in the majority of the country, the housing market will soon “spring forward!” Similar to tension in a spring, the lack of inventory available for sale in the market right now is what is holding back the market.

    Many potential sellers believe that waiting until Spring is in their best interest, and traditionally they would have been right.

    Buyer demand has seasonality to it, which usually falls off in the winter months, especially in areas of the country impacted by arctic temperatures and conditions.

    That hasn’t happened this year.

    Demand for housing has remained strong as mortgage rates have remained near historic lows.

    The National Association of Realtors (NAR) recently reported that the top 10 dates sellers listed their homes in 2015 all fell in April, May or June.

    Those who act quickly and list now could benefit greatly from additional exposure to buyers prior to a flood of more competition coming to market in the next few months.

    Bottom Line

    If you are planning on selling your home in 2016, let's meet up to evaluate the opportunities in your market.

     
  • Home Is Where The Heart Is | Simplifying The Market

    Home Is Where The Heart Is

    Yesterday, we discussed the reasons why homeownership makes sense, financially. Today we wanted to touch on the emotional or ‘real’ reasons that many Americans strive to become homeowners. 

    The Joint Center for Housing Studies at Harvard University performs a study every year surveying participants for the reasons that American’s feel are most important in regards to homeownership.

    The top 4 reasons to own a home cited by respondents were not financial.

    1. It means having a good place to raise children & provide them with a good education

    From the best neighborhoods to the best school districts, even those without children at the time of purchasing their home, may have this in the back of their mind as a major reason for choosing the location of the home that they purchase. 

    2. You have a physical structure where you & your family feel safe

    It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.

    3. It allows you to have more space for your family

    Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list. 

    4. It gives you control over what you do with your living space, like renovations and updates

    Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?

    The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents: 

    5. Owning a home is a good way to build up wealth that can be passed along to my family

    Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future? 

    Bottom Line

    Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in their life, now is a great time to reflect on the intangible factors that make a house a home.

  • How To Get The Most Money When Selling Your House | Simplifying The Market

    How To Get The Most Money When Selling Your House

    Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to ensuring you get the highest price possible.

    1. Price it a LITTLE LOW

    This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).

    How To Get The Most Money When Selling Your House | Simplifying The Market

    Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. In that way, the seller will not be fighting with a buyer over the price, but instead will have multiple buyers fighting with each other over the house.

    Realtor.com, gives this advice:

    “Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

    2. Use a Real Estate Professional

    This too may seem counter intuitive. The seller may think they would net more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.

    Research posted by the Economists’ Outlook Blog revealed that:

    “The median selling price for all FSBO homes was $210,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $151,900. However, homes that were sold with the assistance of an agent had a median selling price of $249,000 – nearly $40,000 more for the typical home sale.”

    How To Get The Most Money When Selling Your House | Simplifying The Market

    Bottom Line

    Price your house at or slightly below the current market value and hire a professional. That will guarantee you maximize the price you get for your house.

  • Low Inventory Causes Home Prices to Accelerate | Simplifying The Market

    Low Inventory Causes Home Prices to Accelerate

    The National Association of Realtors (NAR) released their latest Quarterly Metro Home Price report earlier this month. The report revealed that home prices are not only continuing to rise but that the increases are accelerating. Lawrence Yun, Chief Economist at NAR, discussed the impact of low inventory on buyers in the report:

    "Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead.”

    Here are the percentage increases of home prices for the last two quarters:

    Low Inventory Causes Home Prices to Accelerate | Simplifying The Market

    What this means to sellers

    Rising prices are a homeowner’s best friend. As reported by CoreLogic in a recent blog post:

    “With demand strong and inventory thin, the share of homes selling for the list price or more has also returned to pre-bust levels. With inventory tight, homes are more likely to sell above the asking price.”

    What this means to buyers

    In a market where prices are rising, buyers should take into account the cost of waiting. Obviously, they will pay more for the same house later this year. However, as Construction Dive reported, the amounts of cash necessary to buy a home will also increase.

    “These factors have created a situation where the market keeps moving the goalposts in terms of the down payment necessary for first-time homebuyers to get into a home.” 

    Bottom Line

    If you’re thinking of selling and moving down, waiting might make sense. If you are a first time buyer or a seller thinking of moving up, waiting probably doesn’t make sense.

  • Mortgage Rates Again at Historic Lows | Simplifying The Market

    Mortgage Rates Again at Historic Lows

    Just two weeks ago, we posted an article discussing where mortgage interest rates may be heading over the next twelve months. We quoted projections from Fannie MaeFreddie Mac, the Mortgage Bankers’ Association and the National Association of Realtors. Each predicted that rates would begin to rise slowly and steadily throughout 2016.

    However, shaky economic news and a volatile stock market have actually caused rates to drop six out of the last seven weeks, and have remained at 3.65% for the past two weeks.

    Mortgage Rates Again at Historic Lows | Simplifying The Market

    Rates have again fallen to historic lows yet many experts still expect them to increase in 2016. The only thing we know for sure is that, according to Freddie Mac, current rates are the best they have been since last April.

    Bottom Line

    If you are thinking of buying your first home or moving up to your ultimate dream home, now is a great time to get a sensational rate on your mortgage.

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