San Diego Real Estate Expert: October 2021

Saturday, October 30, 2021

Your Home Equity Is Growing

Some Highlights

If you’re a homeowner, today’s rising equity is great news. On average, homeowners have gained $51,500 in equity since this time last year.

Whether it’s funding an education, fueling your next move, or starting a business, your home equity is a great tool you can use to power your dreams.

Ready to sell? Let’s connect to talk about how you can take advantage of your rising equity to reach your goals.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - eXp Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
We Go to Extremes to Fulfill Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017, 2018,& 2019 Recognition of Excellence Award Winner SDAR

Thursday, October 28, 2021

Important Distinction: Homes Are Less Affordable, Not Unaffordable

It’s impossible to research the subject of buying a home without coming across a headline declaring that the fall in home affordability is a crisis. However, when we add context to the most recent affordability statistics, we soon realize that, though homes are less

affordable than they have been over the last few years, they are more affordable than they historically have been.

Black Knight, a premier provider of data and analytics for the mortgage industry, just released their latest Monthly Mortgage Monitor which includes a new analysis of the affordability situation. Here’s what the report reveals:

“The monthly payment required to purchase the average priced home with a 20% down 30-year fixed rate mortgage increased by nearly 20% (+$210) over the first nine months of 2021, . . . It now requires 21.6% of the median household income to make the monthly mortgage payment on the average home purchase, the least affordable housing has been since 30-year rates rose to nearly 5% back in late 2018.”

Basically, the report shows that homes are less affordable today than at any other time in the last three years. However, in a previous report earlier this year, Black Knight calculated that the percentage of the median household income to make the monthly mortgage payment on the average home purchase over the last 25 years was 23.6% (see graph below):

Today’s payment-to-income ratio is more affordable than the average over the last 25 years. Given that context, we can see that American households still have the same ability to be homeowners as their parents did 20 years ago.

This confirms the recent analysis of ATTOM Data resources where Todd Teta, Chief Product and Technology Officer, explains:

“The typical median-priced home around the U.S. remains affordable to workers earning an average wage, despite prices that keep going through the roof. Super-low interests and rising pay continue to be the main reasons why.”

Bottom Line

It’s true that it’s less affordable to buy a home today than it has been the last few years. However, it’s more affordable to buy today than the average over the last 25 years. In other words, homes are less affordable, but they’re not unaffordable. That’s an important distinction.

Looking to Buy, Sell, or Invest? Contact:

Tuesday, October 26, 2021

What Does the Future Hold for Home Prices?

If you’re looking to buy or sell a house, chances are you’ve heard talk about today’s rising home prices. And while this increase in home values is great news for sellers, you may be wondering what the future holds. Will prices continue to rise with time, or should you expect them to fall?

To answer that question, let’s first understand a few terms you may be hearing right now.
Appreciation is an increase in the value of an asset.
Depreciation is a decrease in the value of an asset.
Deceleration is when something happens at a slower pace.

It’s important to note home prices have increased, or appreciated, for 114 straight months. To find out if that trend may continue, look to the experts. Pulsenomics surveyed over 100 economists, investment strategists, and housing market analysts asking for their five-year projections. In terms of what lies ahead, experts say the market may see some slight deceleration, but not depreciation.

Here’s the forecast for the next few years:

As the graph above shows, prices are expected to continue to rise, just not at the same pace we’ve seen over the last year. Over 100 experts agree, there is no expectation for price depreciation. As the arrows indicate, each number is an increase, which means prices will rise each year.

Bill McBride, author of the blog Calculated Risk, also expects deceleration, but not depreciation:

“My sense is the Case-Shiller National annual growth rate of 19.7% is probably close to a peak, and that year-over-year price increases will slow later this year.”

Ivy Zelman of Zelman & Associates agrees, saying:

“. . . home price appreciation is on the cusp of flipping to a decelerating trend.”

A recent article from realtor.com indicates you should expect:

“. . . annual price increases will slow to a more normal level, . . .”
What Does This Deceleration Mean for You?

What experts are projecting for the years ahead is more in line with the historical norm for appreciation. According to data from Black Knight, the average annual appreciation from 1995-2020 is 4.1%. As you can see from the chart above, the expert forecasts are closer to that pace, which means you should see appreciation at a level that’s aligned with a more normal year.

If you’re a buyer, don’t expect a sudden or drastic drop in home prices – experts say it won’t happen. Instead, think about your homeownership goals and consider purchasing a home before prices rise further.

If you’re a seller, the continued home price appreciation is good news for the value of your house. Work with an agent to list your house for the right price based on market conditions.

Bottom Line

Experts expect price deceleration, not price depreciation over the coming years. Let’s connect to talk through what’s happening in the housing market today, where things are headed, and what it means for you.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - eXp Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
We Go to Extremes to Fulfill Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017, 2018,& 2019 Recognition of Excellence Award Winner SDAR

Sunday, October 24, 2021

Sellers: Your House Could Be an Oasis for Buyers Seeking More Options

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 incr)edible 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.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - eXp Realty

Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
We Go to Extremes to Fulfill Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017, 2018,& 2019 Recognition of Excellence Award Winner SDAR

Friday, October 22, 2021

What Do Past Years Tell Us About Today’s Real Estate Market?

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 record speed (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 of offers 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.

Looking to Buy, Sell, or Invest? Contact:

Thursday, October 21, 2021

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Tuesday, October 19, 2021

The Big Question: Should You Renovate or Move?

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.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - eXp Realty

Saturday, October 16, 2021

Don’t Wait for a Lower Mortgage Rate – It Could Cost You

Today’s housing market is truly one for the record books. Over the past year, we’ve seen the lowest mortgage rates in history. And while those rates seemed to bottom out in January of this year, the golden window of opportunity for buyers isn’t over just yet. If you’re one of the buyers who worry they’ve missed out, rest assured today’s mortgage rates are still worth taking advantage of.

Even today, our mortgage rates are below what they’ve been in recent decades. So, while you may not be able to lock in the rate your friend got recently, you’re still in a great position to secure a rate well below what your parents and even grandparents got in years past. The key will be acting sooner rather than later.

In late September, mortgage rates ticked above 3% for the first time in months. And according to experts throughout the industry, mortgage rates are projected to continue rising in the months ahead. Here’s where experts say rates are headed:

While a projected half percentage point increase may not seem substantial, it does have an impact when you’re buying a home. When rates rise even slightly, it affects how much you’ll pay month-to-month on your home loan. The chart below shows how it works:

In this example, if rates rise to 3.55%, you’ll pay an extra $100 each month on your monthly mortgage payment if you purchase a home around this time next year. That extra money can really add up over the life of a 15 or 30-year loan.

Clearly, today’s mortgage rates are worth taking advantage of before they climb further. The rates we’re seeing right now give you a unique opportunity to afford more home for your money while keeping your monthly payment down.

Bottom Line

Waiting for a lower mortgage rate could cost you. Experts project rates will continue to rise in the months ahead. Let’s connect so you can seize this opportunity before they increase further.

Looking to Buy, Sell, or Invest? Contact:

Thursday, October 14, 2021

4 Tips To Prep for Your Home Sale This Fall

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.

Looking to Buy, Sell, or Invest? Contact:

Tuesday, October 12, 2021

Reasons Renters Buy

Some Highlights

When deciding whether you should rent or buy, make sure you’re considering these factors.
Buying a home means consistent monthly payments. Homeownership also helps to build your wealth. And owning a home gives you greater flexibility than renting.
If you’re ready to take advantage of the perks of homeownership, let’s connect to explore your options.

Looking to Buy, Sell, or Invest? Contact:

Sunday, October 10, 2021

As Home Equity Rises, So Does Your Wealth

Homeownership is still a crucial part of the American dream. For those people who own a home (and those looking to buy one), it’s clear that being a homeowner has considerable benefits both emotionally and financially. In addition to long-term stability, buying a home is one of the best ways to increase your net worth. This boost to your wealth comes in the form of equity.

Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.

The best thing about equity is that it often grows without you even realizing it, especially in a sellers’ market like we’re in now. In today’s real estate market, the combination of low housing supply and high buyer demand is driving home values up. This is giving homeowners a significant equity boost.

According to the latest data from CoreLogic, the amount of equity homeowners have has continued to grow as home values appreciate. Here are some key takeaways from the Homeowner Equity Insights Report:

The average homeowner gained $51,500 in equity over the past year
There was a 29.3% increase in national homeowner equity year over year

To give you an idea of what that looks like in your area, the map below shows the average equity gains by state.

What does all of that mean for you?

If you’re already a homeowner, you likely have more equity in your house than you realize. The numbers in the map above reflect year-over-year growth. If you’ve been in your home for longer than a year, you’ll likely have even more equity than that. That equity can take you places. You can use the equity you’ve gained to fuel your next move, achieve other life goals, and more.

On the other hand, if you haven’t purchased a home yet, understanding equity can help you realize why homeownership is a worthwhile goal. Homeowners across the nation gained an average of over $50,000 in equity this year. Don’t miss out on this chance to grow your net worth.

Bottom Line

If you want to learn more, let’s connect. A trusted advisor can help you understand where home prices are today, how they contribute to a homeowner’s net worth, and the impact equity can have when you own a home.

Looking to Buy, Sell, or Invest? Contact:

Friday, October 8, 2021

Don’t Tackle Selling Your Home on Your Own – an Agent Can Help

If you’re looking to maximize your sale and minimize your effort, you need to work with a real estate professional. In a sellers’ market like today’s, it can be tempting to list your house on your own – known as For Sale By Owner (FSBO). But the truth is, a real estate professional can save you time and money by managing every step of the process, from pricing your home to reviewing documents and handling negotiations.

Before you decide to sell your house on your own, here are five reasons why working with an agent is your best bet to maximize the sale of your home.

1. First impressions are everything – and an agent knows how to make a great one.

Prepping a house for sale requires a significant amount of time and effort, even though it may seem simple at first glance. Doing it right so it stands out takes expertise and an understanding of what buyers are looking for. An agent considers things like:
Should you take down any personal art or pictures?
How much landscaping should you invest in to boost your house’s curb appeal?

What wall colors are most appealing to buyers?

An expert real estate advisor relies on their experience to answer these questions and more so you don’t invest in the wrong things. Your time and money are important – you shouldn’t waste either.

2. Agents have tools to maximize the number of views your home gets.

Put plainly, the more buyers that view your house, the better your return will be. In our current market, homes are receiving 3.8 offers on average per sale, according to recent data from the National Association of Realtors (NAR). While that’s promising for the sale of your home, it’s important to understand your agent’s role in bringing buyers in.

Agents have multiple tools at their disposal – from social media to agency resources – to ensure your home is viewed by more prospective buyers. Leveraging the tools available to your agent and your agent’s expertise may help boost your sale price as well.

3. An agent won’t miss anything in the fine print.

Your agent can also save you time by taking any guesswork out of navigating the required documentation. Today, more disclosures and regulations are mandatory, meaning the number of legal documents you need to juggle is growing.

Because there’s so much to take care of, it can be hard to truly understand all of the requirements and the fine print. That’s where an expert advisor can truly shine. They’ve been through the process before and can be your guide to avoid any costly missteps.

4. Expert advisors know the market and how to price your home.

Another way your agent maximizes the sale of your home is by making sure it’s priced right. Real estate professionals have the experience to compare your house to recently sold homes in your area. They also understand the market at large and can factor in any upgrades you’ve completed to your home. Combining these factors is the key to making sure your home is priced to move quickly – and at a competitive price.

When you FSBO, you’re operating without this expertise. Even with your own research, you may not find the most up-to-date information and could risk setting a price that’s inaccurate or unrealistic. If you price your house too high, you could turn buyers away before they’re even in the front door. This could also cause problems when it’s time for the appraisal.

5. Your agent will be an expert negotiator.

In addition to their experience navigating sales, real estate professionals understand how to negotiate every aspect of a deal. They also know all the parties that will be involved with the sale, including:

The buyer, who wants the best deal possible.
The buyer’s agent, who will use their expertise to advocate for the buyer.
The inspection company, which works for the buyer and will almost always find concerns with the house.

The appraiser, who assesses the property’s value to protect the lender.

An agent relies on their experience and training to make the right moves during the negotiation. They’ll know what levers to pull, how to address each individual’s concerns, and when you may want to get a second opinion. Selling your house as a FSBO means you’ll need to be prepared to have these conversations on your own.

Bottom Line

Selling a house takes time, effort, and expertise – don’t go at it alone. Let’s connect to make sure you have an expert on your side to make the most of your sale

Looking to Buy, Sell, or Invest? Contact:

Tuesday, October 5, 2021

Early October is the Sweet Spot for Buyers

Are you looking to buy a home? If so, we’ve got good news for you.

While there’s no denying the housing market is having a great year, many of the headlines are focused on the perks for sellers. But what about buyers today? As a buyer, you’re likely braving bidding wars and weighing low mortgage rates versus price appreciation as you search for your dream home. If you find yourself a bit discouraged, hear this: there are clear signs buyers may have more opportunities this fall.

According to realtor.com, the sweet spot for buyers is just around the corner. In a recent study, experts analyzed housing market trends by looking at data from the past several years. When applied to the current market, experts determined the ideal week to buy a home this year. The research says:

“Nationally, the best time to buy in 2021 is the week of October 3-9. This week historically has shown the best balance of market conditions that favor buyers.”

So, what’s that mean for you? If you’re looking to buy a home, there’s a golden window of opportunity coming. Here’s what you can expect from that week.

Increased Housing Supply

The number of homes available for sale should increase. According to realtor.com, you can expect to see more new listings come to market the week of October 3. The findings estimate we’ll see roughly 17.6% more homes available than we saw at the start of the year.

This means you’ll have more options to choose from which should be a welcome relief in a market with tight housing supply.

Fewer Bidding Wars

With more homes available, you should also see a slight decline in the number of bidding wars. Having more options means buyers may not be competing as intensely for the homes on the market because there are more choices to go around.

This means when you write an offer, you may have less competition and a better chance of being the top bid. Just remember, it’s still important to come in with a strong offer.

Adjusted Homes Prices

As we move into the end of the year, the findings from realtor.com note this week may also be one of the peak weeks for price reductions in 2021. Historically the data shows an average of 7.0% of homes have a price reduction that week. Why? When housing supply ticks up, sellers need to look for other ways to make their house stand out.

This means, while home prices are still appreciating overall, you may see some homes with price adjustments from eager sellers. The process of closing a house takes time. To close before end of year, sellers may be more motivated this October.

Bottom Line

If you’re in the market for a home, don’t lose steam now. Data shows early October may give you the long-awaited opportunity to find the home of your dreams. Let’s connect so you have a trusted ally and advisor to help keep you motivated so you can find the perfect home for you.

Looking to Buy, Sell, or Invest? Contact:

Sunday, October 3, 2021

If You’re a Buyer, Is Offering Asking Price Enough?

In today’s real estate market, buyers shouldn’t shop for a home with the expectation they’ll be able to negotiate a lower sales price. In a typical housing market, buyers try to determine how much less than the asking price they can offer and still get the home. From there, the buyer and seller typically negotiate and agree on a revised price somewhere in the middle.

Things Are Different Today

Today’s housing market is anything but normal. According to the National Association of Realtors (NAR), homes today are:
Receiving an average of 3.8 offers
Selling in just 17 days

Homes selling quickly and receiving multiple offers highlights how competitive the housing market is right now. This is due, in large part, to the low supply of homes for sale. Low supply and high demand mean homes often sell for more than the asking price. In some cases, they sell for a lot more. Selma Hepp, Deputy Chief Economist at CoreLogic, explains how these stats can impact buyers:

“The imbalance between robust demand and dismal availability of for-sale homes has led to a continual bidding over asking prices, which reached record levels in recent months. Now, almost 6 in 10 homes listed are selling over the asking price.”

You May Need To Rethink How You Look at a Home’s Asking Price

What does that mean for you? If you’ve found your dream home, you need to be realistic about today’s housing market and how that impacts the offer you’ll make. Offering below or even at a home’s asking price may not cut it. In today’s market, the highest bidder often wins the home, much like at an auction.

Currently, the asking price is often the floor of the negotiation rather than the ceiling. If you really love a home, it may ultimately sell for more than the sellers are asking. That’s important to keep in mind as you work with your agent to craft an offer.

Understand An Appraisal Gap Can Happen

Because of today’s home price appreciation and the auction-like atmosphere in the selling process, appraisal gaps – the gap between the price of your contract and the appraisal for the house – are more frequent.

According to data from CoreLogic:

“Beginning in January 2020, nationally, 7% of purchase transactions had a contract price above the appraisal, but by May 2021, the frequency had increased to 19% of purchase transactions.”

When this happens, your lender won’t loan you more than the home’s appraised value, and the seller may ask you to make up the difference out of pocket. Buyers in today’s market need to be prepared for this possibility. Know your budget, know what you can afford, and work with a trusted advisor who can offer expert advice along the way.

Bottom Line

Bidding wars and today’s auction-like atmosphere mean buyers need to rethink how they look at the asking price of a home. Let’s connect so you have a trusted real estate professional who can advise you on the current market and help determine what the market value is on your dream home.

Looking to Buy, Sell, or Invest? Contact:

Friday, October 1, 2021

It’s Still a Sellers’ Market

Some Highlights:

Due to low supply and high demand, today is one of the strongest sellers’ markets we’ve seen.
Sellers can benefit from more offers to pick from, higher home values, and a faster sales process. That might be why 73% of people believe it’s a good time to sell.
Sellers, don’t miss out on this unique opportunity. Let’s connect so you can take advantage of this hot sellers’ market.

Looking to Buy, Sell, or Invest? Contact: