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Is the Shifting Market a Challenge or an Opportunity for Homebuyers?

(Published on - 8/13/2022 7:33:48 PM)

Is the Shifting Market a Challenge or an Opportunity for Homebuyers?

If you tried to buy a home during the pandemic, you know the limited supply of homes for sale was a considerable challenge. It created intense bidding wars which drove home prices up as buyers competed with one another to be the winning offer.

But what was once your greatest challenge may now be your greatest opportunity. Today, data shows buyer demand is moderating in the wake of higher mortgage rates. Here are a few reasons why this shift in the housing market is good news for your homebuying plans.

The Challenge

There were many reasons for the limited number of homes on the market during the pandemic, including a history of underbuilding new homes since the market crash in 2008. As the graph below shows, housing supply is well below what the market has seen for most of the past 10 years (see graph below):

Is the Shifting Market a Challenge or an Opportunity for Homebuyers? | Keeping Current Matters

The Opportunity

But that graph also shows a trend back up in the right direction this year. That’s because moderating demand is slowing the pace of home sales and that’s one of the reasons housing supply is finally able to grow. For you, that means you’ll have more options to choose from, so it shouldn’t be as difficult to find your next home as it has been recently.

And having more options may also lead to less intense bidding wars. Data from the Realtors Confidence Index from the National Association of Realtors (NAR) shows this trend has already begun. In their recent reports, bidding wars are easing month-over-month (see graph below):

Is the Shifting Market a Challenge or an Opportunity for Homebuyers? | Keeping Current Matters

If you’ve been outbid before or you’ve struggled to find a home that meets your needs, breathe a welcome sigh of relief. The big takeaway here is you have more options and less competition today.

Just remember, while easing, data shows multiple-offer scenarios are still happening – they’re just not as intense as they were over the past year. You should still lean on an agent to guide you through the process and help you make your strongest offer up front.

Bottom Line

If you’re still looking to make a move, it may be time to pick your home search back up today. Partner with a real estate professional to kick off the homebuying process.

Source: Keeping Current Matters

Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880
E-Mail: experts@realtyexecutives.com


Why It’s Still a Sellers’ Market

(Published on - 8/6/2022 5:42:47 PM)

Why It’s Still a Sellers’ Market

As there’s more and more talk about the real estate market cooling off from the peak frenzy it saw during the pandemic, you may be questioning what that means for your plans to sell your house. If you’re thinking of making a move, you should know the market is still anything but normal.

Even though the supply of homes for sale has been growing this year, there’s still a shortage of homes on the market. And that means conditions continue to favor sellers today. That’s because the level of inventory of homes for sale can help determine if buyers or sellers are in the driver’s seat. Think of it like this:

  • buyers’ market is when there are more homes for sale than buyers looking to buy. When that happens, buyers have the negotiation power because sellers are more willing to compromise so they can sell their house.
  • In a sellers’ market, it’s just the opposite. There are too few homes available for the number of buyers in the market and that gives the seller all the leverage. In that situation, buyers will do what they can to compete for the limited number of homes for sale.
  • neutral market is when supply is balanced and there are enough homes to meet buyer demand at the current sales pace.

And for the past two years, we’ve been in a red-hot sellers’ market because inventory has been near record lows. The blue section of this graph highlights just how far below a neutral market inventory still is today.

Why It’s Still a Sellers’ Market | Keeping Current Matters

What Does This Mean for You?

Ed Pinto, Director of the American Enterprise Institute’s Housing Center, gives a perfect summary of what’s happening in today’s market, saying:

“Overall, the best summary is that we’ll move from a gangbuster sellers’ market to a modest sellers’ market.”

Conditions are still in your favor even though the market is cooling. If you work with an agent to price your house at market value, you’ll find success when you sell your house today. While buyer demand is softening due to higher mortgage rates, homes that are priced right are still selling fast. That means your window of opportunity to list your house hasn’t closed.

Bottom Line

Today’s housing market still favors sellers. If you’re ready to sell your house, connect with a local real estate advisor so you can start making your moves.

Source: Keeping Current Matters

Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880
E-Mail: experts@realtyexecutives.com


4 DIY Jobs Sellers Should Stop Doing

(Published on - 7/30/2022 6:29:26 PM)

Plumbing Accident

Home inspectors say they can spot the work of an amateur versus a pro.

Homeowners may have gotten overconfident with their DIY skills. Armed with YouTube tutorials and extra time at home during the pandemic, more homeowners have been drawn to DIY house projects to save money and bypass waits for overbooked contractors. Home inspectors are seeing the results of that DIY surge. When homeowners go to sell, they say more DIY jobs are popping up as red flags.

“We want homeowners to be handy, but we want them to be careful about what they choose to do to their home,” says Adam Long, president of the HomeTeam Inspection Service, which has 200-plus offices nationwide. “It’s important to know when to call in a professional. Saving $200 to $300 for an electrician or plumber could end up costing you thousands in the end.”

Here are the areas where home inspectors are noticing an uptick, Long says.

 

#1 Electrical Work

Common DIY tasks: Installing a lighting fixture, ceiling fan, or dimmer switch

Risks: Electrocution and home electrical fires

Red flags: Inspectors are spotting overloaded circuit boxes, wires left exposed or the wrong wires being used, and improper junction boxes. “Any changes in the electrical box can be problematic, even when it seems minor like adding a dimmer or wall switch or even a Wi-Fi–enabled switch,” Long says. Personal dangers aside, faulty wiring can cause shorts that lead to house fires. Further, homeowners who do their own electrical work may have failed to get the necessary permits—approvals from municipalities that shows a job was done to code. Failing to get permits can result in fines and hold up a home sale.

 

#2 Plumbing

Common DIY tasks: Changing a faucet or appliance

Risks: Water leaks or flooding to the home and mold

Red flags: Plumbing that is wrongly installed or repaired can cause significant damage to a home, such as flooding and eventual wood rot and mold growth, which can affect air quality and human health. “Be careful any time you do anything with the home’s plumbing to make sure you are doing it safely and correctly,” Long says. Homeowners may be tempted to change a faucet or update an appliance like a dishwasher. But one wrong connection can lead to costly damage. A dishwasher requires lots of water pressure. If it’s not properly hooked up, homeowners could experience significant flooding in a kitchen.

 

#3 Roofing & Decks

Common DIY tasks: Installing or extending a new deck or repairing roof shingles

Risks: Injuries from falls and damage to the home

Red flags: Home inspectors say DIY deck installations often are improperly attached to the house or have loose, insecure handrails, both of which pose safety concerns. With roofs, homeowners may try to replace a shingle. “Professionals take extra precautions and know how to stay safe on the roof while making repairs,” Long says. Decks and roofs are some of the highest-priced home items to fix—and where the labor tends to be more expensive than materials, homeowners are too often tempted to do it themselves for the savings, Long says.

 

#4 Landscape Grading

Common DIY tasks: Adding landscaping or outdoor elements that change water flow around the home

Risks: Improper draining, flooding, and structural damage

Red flags: Inspectors may spot puddles of water around the home’s foundation. When the house was built, the yard was graded so that water would flow away from the home. But after a few years, grading may not have been properly maintained. This can cause water to rush around the foundation and lead to structural damage or water entering a basement or crawl space. “This one is an easy one to pay attention to, especially when it’s raining,” Long says. “That’s the best time to check that water is moving away from the foundation. The gutters should be directing water away from the foundation, too.” 

Author: Melissa Dittmann Tracey

Original Article: https://magazine.realtor/home-and-design/feature/article/2022/07/4-diy-jobs-sellers-should-stop-doing

EXPERT HOUSING MARKET FORECASTS FOR THE SECOND HALF OF THE YEAR

(Published on - 7/24/2022 6:28:39 PM)

Expert Housing Market Forecasts for the Second Half of the Year

The housing market is at a turning point, and if you’re thinking of buying or selling a home, that may leave you wondering: is it still a good time to buy a home? Should I make a move this year? To help answer those questions, let’s turn to the experts for projections on what the second half of the year holds for residential real estate.

Where Mortgage Rates Will Go Depends on Inflation

While one of the big questions on all buyers’ minds is where will mortgage rates go in the months ahead, no one has a crystal ball to know exactly what’ll happen in the future. What housing market experts know for sure is that the record-low mortgage rates during the pandemic were an outlier, not the norm.

This year, rates have climbed over 2% due to the Federal Reserve’s response to rising inflation. If inflation continues to rise, it’s likely that mortgage rates will respond. Greg McBride, Chief Financial Analyst at Bankrateexplains it well:

“Until inflation peaks, mortgage rates won’t either. Without improvement on the inflation front, we don’t know where the interest rate ceiling will be.”

Whether you’re buying your first home or selling your current house to make a move, today’s mortgage rate is an important factor to consider. When rates rise, they impact affordability and your purchasing power. That’s why it’s crucial to work with a team of professionals, so you have expert advice to help you make an informed decision about your best move.

The Supply of Homes for Sale Projected To Continue Increasing

This year, particularly this spring, the number of homes for sale has grown. That’s partly due to more homeowners listing their houses, but also because higher mortgage rates have helped ease the intensity of buyer demand. Moderating buyer demand slows down the pace of home sales, which in turn helps inventory rise.

Experts say that growth will continue. Recently, realtor.com updated their 2022 inventory forecast. In the latest release, they increased their projections for inventory gains dramatically, going from a 0.3% increase at the beginning of the year to a 15.0% jump by the end of 2022 (see graph below):

Expert Housing Market Forecasts for the Second Half of the Year | Keeping Current Matters

More homes to choose from is great news if you’re craving more options for your home search – just know that there isn’t a sudden surplus of inventory on the horizon. Housing supply is still low, so you’ll need to partner with an agent to stay on top of what’s available in your market and move fast when you find the one. It’s not going to be easy to find a home, but it certainly won’t be as difficult as it has been over the past two years.

Home Price Forecasts Call for Ongoing Appreciation

Due to the imbalance between the number of homes for sale and the number of buyers looking to make a purchase, the pandemic led to record-breaking increases in home prices. According to CoreLogic, homes appreciated by 15% in 2021, and they’ve continued to rise this year.

Even though housing supply is increasing today, there are still more buyers than there are homes for sale, and that’s maintaining the upward pressure on home prices. That’s why experts are not calling for prices to decline, rather they’re forecasting they’ll continue to climb, just at a more moderate pace this year. On average, homes are projected to appreciate by about 8.5% in 2022 (see graph below):

Expert Housing Market Forecasts for the Second Half of the Year | Keeping Current Matters

Selma Hepp, Deputy Chief Economist at CoreLogic, explains why the housing market will see deceleration, but not depreciation, in prices:

“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.

For current homeowners looking to sell, know your home’s value isn’t projected to fall, but waiting to make your purchase does mean your next home could cost more as home prices continue to appreciate. That’s why, if you’re thinking about buying your first home or you’re ready to make a move, it may make sense to do so now before prices climb higher. But rest assured, once you buy a home, that price appreciation will help grow the value of your investment.

Bottom Line

Whether you’re a homebuyer or seller, you need to know what’s happening in the housing market, so you can make the most informed decision possible. Connect with a real estate advisor to discuss your goals and what lies ahead, so you can determine the best plan for your move.

 

Source: Keeping Current Matters

Realty Executives Midwest
1310 Plainfield Rd. Ste 2 | Darien, IL 60561
Office: 630-969-8880
E-Mail: experts@realtyexecutives.com


The Drop in Mortgage Rates Brings Good News for Homebuyers

(Published on - 7/16/2022 3:26:42 PM)

Over the past few weeks, the average 30-year fixed mortgage rate from Freddie Mac fell by half a percent. The drop happened over concerns about a potential recession. And since mortgage rates have risen dramatically this year, homebuyers across the country should see this decline as welcome news.

Freddie Mac reports that the average 30-year rate was down to 5.30% from 5.81% two weeks prior (see graph below):

The Drop in Mortgage Rates Brings Good News for Homebuyers | Keeping Current Matters

But why is this recent dip such good news for homebuyers? As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), explains:

“According to Freddie Mac, the 30-year fixed mortgage rate dropped sharply by 40 basis points to 5.3 percent. . . . As a result, home buying is about 5 percent more affordable than a week ago. This translates to about $100 less every month on a mortgage payment.

That’s because when rates go up (as they have for the majority of this year), they impact how much you’ll pay in your monthly mortgage payment, which directly affects how much you can comfortably afford. The inverse is also true. A decrease in mortgage rates means an increase in your purchasing power.

The chart below shows how a half-point, or even a quarter-point, change in mortgage rates can impact your monthly payment:

Bottom Line

If your home doesn’t meet your needs, this may be the opportunity you’ve been waiting for. Contact a local real estate advisor today to see how you can benefit from the current drop in mortgage rates.

Article authored by and shared from: Keeping Current Matters


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