Carmela Pereira
Real Estate Professional
Realty Executives Elite Homes
A new year brings with it the opportunity for new experiences. If that resonates with you because you’re considering making a move, you’re likely juggling a mix of excitement over your next home and a sense of attachment to your current one.
A great way to ease some of those emotions and ensure you’re feeling confident in your decision is to keep these three best practices in mind.
The housing market shifted in 2022 as mortgage rates rose, buyer demand eased, and the number of homes for sale grew. As a seller, you’ll want to recognize things are different now and price your house appropriately based on where the market is today. Greg McBride, Chief Financial Analyst at Bankrate, explains:
“Price your home realistically. This isn’t the housing market of April or May, so buyer traffic will be substantially slower, but appropriately priced homes are still selling quickly.”
If you price your house too high, you run the risk of deterring buyers. And if you go too low, you’re leaving money on the table. An experienced real estate agent can help determine what your ideal asking price should be.
Today, homeowners are living in their houses longer. According to the National Association of Realtors (NAR), since 1985, the average time a homeowner has owned their home has increased from 5 to 10 years (see graph below):
This is several years longer than what used to be the historical norm. The side effect, however, is when you stay in one place for so long, you may get even more emotionally attached to your space. If it’s the first home you bought or the house where your loved ones grew up, it very likely means something extra special to you. Every room has memories, and it’s hard to detach from the sentimental value.
For some homeowners, that makes it even harder to negotiate and separate the emotional value of the house from fair market price. That’s why you need a real estate professional to help you with the negotiations along the way.
While you may love your decor and how you’ve customized your home over the years, not all buyers will feel the same way about your design. That’s why it’s so important to make sure you focus on your home’s first impression so it appeals to as many buyers as possible. As NAR says:
“Staging is the art of preparing a home to appeal to the greatest number of potential buyers in your market. The right arrangements can move you into a higher price-point and help buyers fall in love the moment they walk through the door.”
Buyers want to envision themselves in the space so it truly feels like it could be their own. They need to see themselves inside with their furniture and keepsakes – not your pictures and decorations. A real estate professional can help you with tips to get your house ready to sell.
Bottom Line
If you’re considering selling your house, reach out to a local real estate professional to help you navigate through the process while prioritizing these best practices.
They want it fast, they want it easy, and it better be perfect. That pretty much sums up the typical millennial homebuyer today. So, if that's your target and your house isn't pristine, they're going to move on to one that is. So how do you make your home in Rockaway swipeable? It's easy, really.
"Whether or not we admit it, we've all seen at least a few of the home reality shows on channels such as TLC and HGTV. Those shows can be fun and informative, but they also do a lot to shape buyer expectations," said Bankrate.
That means millennial buyers who are looking in Rockaway - maybe more than any other demographic since they grew up in the age of House Hunters and flipping show marathons - will be expecting a house to be spic-n-span and well-staged. Award-winning home stager Tori Toth, author of the best-selling book, FEEL AT HOME: Home Staging Secrets for a Quick and Easy Sell, has some ideas that can be easily implemented to help a home sparkle, including staging your kitchen or your bathroom for under $1,000.
Are the walls of your home beige, gold, or something else in the Mediterranean family? Go gray, instead. As we've seen countless times, most buyers have little vision when it comes to overlooking design issues, and may get hung up on something like a paint color, which keeps them from being able to really see the home. An outdated color may also give them the impression that the rest of the house is outdated.
"The new grays that have gained wide appeal have become a standard base for the millennial palette, along with more whitewashed gray variations, other soft neutrals and cooler whites influenced by Scandinavian décor," said the Chicago Tribune.
Don't be afraid to throw some modern wallpaper up in a space that needs a pop. It can make the buyer feel like time, effort, and care was taken to make the home stand out.
We've been told for decades that kitchens and baths sell homes, and those spaces are top of mind for millennial buyers, too. But, while they may have ideas about what they'd like these spaces to look like, they may not have the patience, or the funds, to pay for them to be redone.
"The primary reason younger buyers seek updated kitchens and baths is because they have limited budgets," Jack Curtis, a Keller Williams real estate agent in Dublin, Ohio, told Bankrate. "Most of their savings will go toward the down payment and furnishings. Kitchens and bathrooms are also the most expensive parts of a home to update, and young homeowners cannot afford to sink a lot of money into those areas."
If you're going for a big renovation in the kitchen, taking down walls to open it up to the living space will reap rewards. Think: A large island with seating, stainless steel appliances, quartz countertops, and new fixtures, "which are especially important for today's young, budget-conscious buyers," said Curtis.
When considering options and materials, muse on this: "A Monitoring the Future study by the University of Michigan showed a dramatic increase resulting in 75% of millennials noting that wealth was a very important life attribute," said Freshome. "Since millennials seem to value money and success, it only seems natural for them to flock to high-tech jobs that lead to wealth and success. This lifestyle requires a home that suitably reflects their values."
The takeaway is that millennials want a space to look rich. But that doesn't mean it has to put you in the poorhouse. Decluttering the space is one of the top tips of home stagers, and this will help create a minimalistic appearance that helps communicate luxury. A few inexpensive, high-end-looking details - a faux fur pillow on the couch, a gilded accessory, a marble-topped side table you pick up at Home Goods for $50 - can take it a step further.
Millennials may want the look of luxury, but they may not want the upkeep. "Most millennials want a turnkey home that needs little or no work. They spend long hours on the job and have many interests, and prefer materials and that require minimal care," said Mary Cook of national, award-winning commercial interior design firm Mary Cook Associates. "That means wood or tile floors, easy-care countertops and gas fireplaces. New products that reflect this are ever-more-functional engineered stones and tiles that mimic more luxurious surfaces, from marble to exotic wood. The model home interiors we create embrace furnishings that reflect these preferences."
Have an extra room that's serving as a guest space or a catch-all? Pick up an inexpensive desk, position the guest chair in front, and now you have a home office. Today, millennials might reject your home altogether and fail to even come for a tour if they don't have a place to work from home. The words "home office" have to be in your listing.
"One defining characteristic of the Millennial generation is that they grew up with technology," said Better Homes and Gardens. "Many were ‘plugged in' from the day they were born. To these individuals, technology is not just a luxury, but it's a necessity. Your home needs to be technologically friendly in order to appeal to these buyers."
Making a few easy changes to add tech features to your home could go a long way toward making it irresistible to a millennial buyer. "Install a simple home automation system like a programmable thermostat that can be linked to your smart phone," they said.
Making sure your home looks good from the street is universally important. But don't forget about the backyard. An annual Better Homes and Gardens survey monitoring "attitude and behavior trends of homeowners in the U.S." took a look at millennials and found that "more than three-quarters (77%) say they want their outdoor living space to feel like a relaxing retreat."
Millennials are visual people. You only need to return to the Tinder analogy to understand that. It's more important than ever to make sure the pictures of the home are stellar. A baby boomer or Gen-Xer may be able to look past photos to come see a home that matches their needs. You may not have the same shot with a millennial.
How far is the local Trader Joe's Whole Foods, and Target? Is there a popular shopping area or group of restaurants nearby? Walkability is key for many millennials. Playing up these details in the home listing and marketing materials can go a long way toward attracting this target.
"With energy costs on the rise and growing interest in protecting the environment, young buyers are conscious of buying homes that are green," said Bankrate.
While many energy-efficient items may not necessarily be seen by the naked eye, expect millennials to "ask about the sustainability of your building materials and practices," said Pacesetter Homes. "They are committed to eco-friendly, energy-efficient homes - with ENERGY STAR appliances, programmable lighting and thermostats, and other high-tech, low-carbon-footprint amenities. Not only can they spell ‘LEED,' but they want this building certification."
Millennials may be turned off by a junky or outdated home masquerading as move-in ready, but if you have a true fixer-upper that's being sold as is, well, Hello challenge! A millennial might be turned on by the idea of having a project, especially if they think they're getting a deal.
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Carmela Pereira
Realty Executives Elite Homes
[M} (973) 580-1991
[O] (973) 846-0065
One of the hottest topics of conversation in today’s real estate market in Rockaway is the shortage of available homes. Simply put, there are many more potential buyers than there are homes for sale. As a seller in Rockaway, you’ve likely heard that low supply is good news for you. It means your house will get more attention, and likely, more offers. But as life begins to return to normal, you may be wondering if that’s something that will change.
While it may be tempting to blame the pandemic for the current inventory shortage, the pandemic can’t take all the credit. While it did make some sellers hold off on listing their houses over the past year, the truth is the low supply of homes was years in the making. Let’s take a look at the root cause and what the future holds to uncover why now is still a great time to sell.
It’s not just today’s high buyer demand. Our low supply goes hand-in-hand with the number of new homes built over the past decades. According to Sam Khater, VP and Chief Economist at Freddie Mac:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Data in a recent report from the National Association of Realtors (NAR) tells the same story. New home construction has been lagging behind the norm for quite some time. Historically, builders completed an average of 1.5 million new housing units per year. However, since the housing bubble in 2008, the level of new home construction has fallen off (see graph below):
The same NAR report elaborates on the impact of this below-average pace of construction:
“. . . the underbuilding gap in the U.S. totaled more than 5.5 million housing units in the last 20 years.”
“Looking ahead, in order to fill an underbuilding gap of approximately 5.5 million housing units during the next 10 years, while accounting for historical growth, new construction would need to accelerate to a pace that is well above the current trend, to more than 2 million housing units per year. . . .”
That means if we build even more new houses than the norm every year, it’ll still take a decade to close the underbuilding gap contributing to today’s supply-and-demand mix. Does that mean today’s ultimate sellers’ market is here to stay?
We’re already starting to see an increase in new home construction, which is great news. But newly built homes can’t bridge the supply gap we’re facing right now on their own. In the State of the Nation’s Housing 2021 Report, the Joint Center for Housing Studies of Harvard University (JCHS) says:
“…Although part of the answer to the nation’s housing shortage, new construction can only do so much to ease short-term supply constraints. To meet today’s strong demand, more existing single-family homes must come on the market.”
When we look at existing homes, the latest reports signal that housing supply is growing gradually month-over-month. This uptick in existing homes for sale shows things are beginning to shift. Based on recent data, Odeta Kushi, Deputy Chief Economist at First American, has this to say:
“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”
Lawrence Yun, Chief Economist at NAR, echoes that sentiment:
“As the inventory is beginning to pick up ever so modestly, we are still facing a housing shortage, but we may have turned a corner.”
So, what does all of this mean for you in Rockaway? Just because life is starting to return to normal, it doesn’t mean you missed out on the best time to sell. It’s not too late to take advantage of today’s sellers’ market and use rising equity and low interest rates to make your next move.
It’s still a great time to sell. Even though housing supply is starting to trend up, it’s still hovering near historic lows. Talk to a trusted real estate professional about how you can list your house now and use the inventory shortage to get the best possible terms for you.
In today’s real estate market, low inventory and high demand are driving up home prices. As many as 54% of homes are getting offers over the listing price, based on the latest Realtors Confidence Index from the National Association of Realtors (NAR). Shawn Telford, Chief Appraiser at CoreLogic, elaborates:
While this is great news for today’s sellers in Rockaway NJ, it can be tricky to navigate if the price of your contract doesn’t match up with the appraisal for the house. It’s called an appraisal gap, and it’s happening more in today’s market than the norm.
According to recent data from CoreLogic, 19% of homes had their appraised value come in below the contract price in April of this year. That’s more than double the percentage in each of the two previous Aprils.
The chart below uses the latest insights from NAR’s Realtors Confidence Index to showcase how often an issue with an appraisal slowed or stalled the momentum of a house sale in May of this year compared to May of last year.
If an appraisal comes in below the contract price, the buyer’s lender won’t loan them more than the house’s appraised value. That means there’s going to be a gap between the amount of loan the buyer can secure and the contract price on the house.
In this situation, both the buyer and seller have a vested interest in making sure the sale moves forward with little to no delay. The seller will want to make sure the deal closes, and the buyer won’t want to risk losing the home. That’s why it’s common for sellers to ask the buyer to make up the difference themselves in today’s competitive market.
Bottom Line
Whether you’re buying or selling in Rockaway, your real estate agent is your ally. They’re with you throughout the process and are there to help you navigate the unexpected, including potential appraisal gaps.
