There Are More Homes Available Now than There Were This Spring

There Are More Homes Available Now than There Were This Spring | Simplifying The Market

There’s a lot of talk lately about how challenging it can be to find a home to buy. While housing inventory is still low, there are a few important things to understand about the supply of homes for sale as we move into the end of the year.

The Number of Homes for Sale Usually Peaks in the Fall

In the residential real estate market, trends generally follow a predictable and seasonal pattern. Typically, the number of homes available for sale (or active monthly listings) peaks in the fall. But in a chapter where so little feels normal, the question becomes: should we expect a fall peak this year?

If we look at the active monthly listings for 2021 (shown in the chart below), we’ll see that the number of homes on the market has increased fairly steadily since spring this year. The realtor.com data shows we’re still seeing an increase in active inventory month-over-month. While that gain is a bit smaller month-to-month (see August to September in the chart), September numbers are still up from the month prior.There Are More Homes Available Now than There Were This Spring | Simplifying The MarketThe important takeaway here is the latest monthly numbers show growth. At the end of September, buyers had more options to pick from than they did this spring. That’s encouraging for buyers who may have paused their search months ago because they had trouble finding a home. Danielle Hale, Chief Economist at realtor.com, sums this up nicely:

“Put simply, this September buyers had more options than they’ve had all year and while that’s typical of early fall, that’s not what happened in 2020. Still, it’s important to remember that while buyers may have an easier time this fall than they did in the spring, the market remains more competitive than it has been historically at this time of year.” 

As Hale says, a fall peak in inventory is in line with typical seasonal trends. While it’s impossible to say for certain what the future holds for housing inventory, we do know both buyers and sellers have opportunities this season based on the latest data.

What Does That Mean for You?

If you’re thinking of buying a home, rest assured you do have more options now than you did earlier this year – and that’s a welcome relief. That said, today’s market is still highly competitive. This isn’t the time to slow your search. It’s actually the season when the number of homes available for sale tends to peak. Focus on the additional options with renewed energy this season and be prepared for ongoing competition from other buyers.

If you’re considering selling your house, realize that while growing, inventory is still low. Selling now means you’ll be in a great position to negotiate with buyers – and competition among buyers is good news for your bottom line. Eager buyers will likely be motivated to act before the holidays, giving you the benefit of a fast sale.

Bottom Line

Whether you’re buying or selling, there’s still a chance to make your goals a reality this season. Let’s connect so we can discuss what’s going on with the local market and current trends and what they mean for you.

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Knowledge Is Power When It Comes to Appraisals and Inspections

Knowledge Is Power When It Comes to Appraisals and Inspections | Simplifying The Market

Buyers in today’s market often have questions about the importance of getting a home appraisal and an inspection. That’s because high buyer demand and low housing supply are driving intense competition and leading some buyers to consider waiving those contingencies to stand out in the crowded market.

But is that the best move? Buying a home is one of the most important transactions in your lifetime, and it’s critical to keep your best interests in mind. Here’s a breakdown of what to expect from the appraisal and the inspection, and why each one can potentially save you a lot of time, money, and headaches down the road.

Home Appraisal

The home appraisal is a critical step for securing a mortgage on your home. As Home Light explains:

“. . . lenders typically require an appraisal to ensure that your loan-to-value ratio falls within their underwriting guidelines. Mortgages are secured loans where the lender uses your home as collateral in case you default on the agreed-upon payments.”

Put simply: when you apply for a mortgage, an unbiased appraisal – typically required by your lender – is the best way to verify the value of the home. That appraisal ensures the lender doesn’t loan you more than what the home is worth.

When buyers are competing like they are today, bidding wars and market conditions can push prices up. A buyer’s contract price may end up higher than the value of the home – this is known as an appraisal gap. In today’s market, it’s common for the seller to ask the buyer to make up the difference when an appraisal gap occurs. That means, as a buyer, you may need to be prepared to bring extra money to the table if you really want the home.

Home Inspection

Like the appraisal, the inspection is important because it gives an impartial evaluation of the home. While the appraisal determines the current value of the home, the inspection determines the current condition of the home. As the American Society of Home Inspectors puts it:

“Home inspections are the opportunity to discover major defects that were not apparent at a buyer’s showing. . . . Your home inspection is to help you make an informed decision about the house, including its condition.”

If there are any concerns during the inspection – an aging roof, a malfunctioning HVAC system, or any other questionable items – you have the option to discuss and negotiate any potential issues with the seller. Your real estate advisor can help you navigate this process and negotiate what, if any, repairs need to be made before the sale is finalized.

Keep in mind – home inspections are critical because they can shed light on challenges you may face as the new homeowner. Without an inspection, serious, sometimes costly issues could come as a surprise later on.

Bottom Line

Both the appraisal and the inspection are important steps in the homebuying process. They protect your best interests as a buyer by providing unbiased information about the home’s value and condition. Let’s connect so you have an expert guiding you throughout the entire process.

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Your Home Equity Is Growing [INFOGRAPHIC]

Your Home Equity Is Growing [INFOGRAPHIC] | Simplifying The Market

Your Home Equity Is Growing [INFOGRAPHIC] | Simplifying The Market

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.

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Important Distinction: Homes Are Less Affordable, Not Unaffordable

Important Distinction: Homes Are Less Affordable, Not Unaffordable | Simplifying The Market

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):Important Distinction: Homes Are Less Affordable, Not Unaffordable | Simplifying The MarketToday’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.

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Overall Mortgage Applications Down, With Refi Share on Weeks-Long Decline

Mortgage applications decreased 6.3% for the week ending Oct. 15, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey.

Key takeaways:

– The Market Composite Index, a measure of mortgage loan application volume, decreased 6.3% on a seasonally adjusted basis from the previous week
– Unadjusted, the index decreased 6% compared with the previous week
– The Refinance Index decreased 7% from the previous week—22% lower YoY
– The seasonally adjusted Purchase Index decreased 5% from the previous week
– The unadjusted Purchase Index decreased 5% compared with the previous week

The takeaway:

Refi applications continue to dip as mortgage rates increase, with the share down 63.3% of total applications.

“Refinance applications declined for the fourth week as rates increased, bringing the refinance index to its lowest level since July 2021. The 30-year fixed rate has increased 20 basis points over the past month and reached 3.23% last week—the highest since April 2021. The 15-year fixed rate increased to 2.54%, which is the highest since July,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting, in a statement. “Purchase activity declined and was 12% lower than a year ago, within the annual comparison range that it has been over the past six weeks. Insufficient housing supply and elevated home-price growth continue to limit options for would-be buyers.”

The post Overall Mortgage Applications Down, With Refi Share on Weeks-Long Decline appeared first on RISMedia.

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How to Create a Customized Tech Approach that Supports Your Agents

Shawna Alt grew up in the real estate business, having watched her mother run her own company. Even though she didn’t initially have the desire, she found herself following in her mother’s successful footsteps.

After graduating from the College of Charleston with a degree in psychology, Alt returned to Madison, Wisconsin, to determine what her next steps would be.

She met with one of her mom’s friends and colleagues, Jim Imhoff, who was CEO of First Realty at the time, and he suggested that she give real estate a try.

Today, Alt serves as president of First Weber, Inc., a company where she’s been part of the leadership team going on 17 years.

About three years ago, Alt sat down with the team to do what she describes as a “typical planning session.” One of the things discussed? Whether or not the buyer, the seller or the agent was their actual client.

“When we took a step back and looked at what we all did every day, it was very clear to us that the agent was our client,” Alt says. “From that point on, we focused on what we were doing every day to help our agents build their business.”

That led to three primary questions: “What do we do?” “How do we do it?” and “Why do we do it?”

“Every type of policy we have—and every tool we utilize—comes back to fulfilling those questions,” Alt says. “We focus a lot on being a resource for our agents, getting feedback and identifying what it is that’s specific and unique to each agent. We then customize the tools we offer based upon the needs they have.”

While some agents are focused on achieving a specific volume or closed unit goal, others are more concerned with achieving the elusive work/life balance. Then there are those who are more mobile oriented as opposed to those who prefer to continue working with paper files.

“We reach out to them on a regular basis so that we can provide them with the tools that best meet their needs,” says Alt, which ultimately laid the foundation for their utilization of Main Street, a suite of front office tools under Constellation1—the platform that drives everything.

“This is where we work with Constellation1,” explains Alt. “It does everything—all of our contact management, our marketing, all of our document and transaction management. We’re able to customize everything from print pieces to electronic marketing pieces as well as the way in which the transaction management piece functions with the agent and interacts with the First Weber app.”

The firm also has its own print shop, where graphic designers create the marketing and direct mail pieces utilized by the firm. All of this comes from the content database that Constellation1 offers, and is one of the primary reasons behind the firm’s success.

“One of the biggest benefits that Constellation1 brings to the table is their willingness to customize their products to meet our needs,” Alt says. “Their approach to meeting our needs melds perfectly with our approach to meet the needs of our agents.”

As of August 2021, there were approximately 1,100 agents at First Weber.

“What makes a good agent is someone who has a growth mindset and is dedicated to helping others,” concludes Alt. “We bring the necessary training and tools to support the business of our agents. They bring the motivation and desire to serve their clients.”

For more information, please visit constellation1.com.

Keith Loria is a contributing editor to RISMedia.

The post How to Create a Customized Tech Approach that Supports Your Agents appeared first on RISMedia.

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Foreclosures See Hard Spike As Federal Protections End

As expected, the end of federal protections in September has coincided with a significant uptick in foreclosures, as default notices, scheduled auctions or bank repossessions spiked 34% in Q3 of this year according to a new report from ATTOM Data Solutions®, potentially foreshadowing a difficult winter for homeowners still struggling through the pandemic. 

The extent of any looming crisis remains unclear, as industry experts have hoped lenders will work with distressed homeowners to prevent the more drastic consequences of financial hardships.  

But without governmental protections, it appears that many banks are willing to at least start the process. New foreclosure filings in September 2021 were more than double compared to September 2020, as lenders hurried to begin the process as soon as protections ended, according to the report. 

“So far the government and the mortgage industry have worked together to do an extraordinary job of preventing millions of unnecessary foreclosures using the foreclosure moratorium and mortgage forbearance program,” said Rick Sharga, executive vice president at ATTOM subsidiary RealtyTrac, in a statement. “But there are hundreds of thousands of borrowers scheduled to exit forbearance in the next two months, and it’s possible that we might see a higher percentage of those borrowers default on their loans.” 

By the Numbers 

In news that could be construed as positive, foreclosures overall are far below levels seen in recent years and are very unlikely to breach those benchmarks by year’s end, even with significant increases according to the report. 

“Despite the increased level of foreclosure activity in September, we’re still far below historically normal numbers,” said Sharga. “September foreclosure actions were almost 70%lower than they were prior to the COVID-19 pandemic in September of 2019, and Q3 foreclosure activity was 60%lower than the same quarter that year.” 

That is almost certainly because of forbearance and the federal foreclosure moratorium, rather than a reflection on the broader economic outlook for borrowers. And the situation for many could still be dire. 

Bank repossessions also jumped 22% in Q3, according to the report; and last month saw an 8% increase in completed foreclosures over the previous month, indicating that many borrowers are not able to defer payments or exit foreclosure in other ways.  

Overall, a total of 45,517 properties had foreclosure filings in Q3 2021. 

Geography 

The rate of foreclosures in Q3 of 2021 did not appear to correlate geographically with any particularly strong pattern. In order, Nevada, Illinois, Delaware, New Jersey and Florida were the top states, all seeing more than one out of every 2,000 properties in the foreclosure process. As far as metros, Atlantic City, New Jersey (one in every 709 housing units with a foreclosure filing); Peoria, Illinois (one in every 754); Bakersfield, California (one in every 923); Cleveland, Ohio (one in every 936); and Las Vegas, Nevada (one in every 1,167) were the hardest hit. 

Least affected states were decidedly more rural and included South Dakota, West Virginia, Oregon, Montana and North Dakota. All had foreclosure rates less than one out of every 15,000 properties.  

As far as completed foreclosures, Illinois and Florida (with 965 and 564 properties repossessed, respectively) were joined by Pennsylvania (480 properties); Michigan (401) and New York (370). Overall, 2,682 housing units nationwide completed foreclosures in September, up 33% from a year ago. 

Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas to jwilliams@rismedia.com.

The post Foreclosures See Hard Spike As Federal Protections End appeared first on RISMedia.

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REALTORS® Joining Together Through the Regional Rally for RRF

NAR PULSE—REALTORS® take pride in stepping in and stepping up wherever there’s a need. It’s what you do, it’s who you R. We need you, your region and all regions to channel your inner R and join together for RRF’s Regional Rally. We’re challenging all regions to step up and participate in the rally to aid any community in the wake of a disaster! Check out your region’s progress here.

Register for October’s Virtual Green Home Tour
Virtual Green Home Tour Series continues on 10/21 at 3 pm ET from Northern Virginia! Join us for a tour of Tall Oaks, a high-performance infill project in Reston, Virginia, of modern townhomes and flats certified to the National Green Building Standard® (NGBS). Encourage your agents to register to learn how to market certified green homes to prospective buyers.

NEW! Introducing the Recently Launched L.E.A.D. Courses
Encourage your agents to LEARN key leadership skills. ELEVATE their position. ACCELERATE their career. DELIVER results. The new L.E.A.D. courses offer REALTORS® a valuable framework to build their leadership competency and develop full potential as a leader. Available now!

The post REALTORS® Joining Together Through the Regional Rally for RRF appeared first on RISMedia.

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Looking To Move? It Could Be Time To Build Your Dream Home.

Looking To Move? It Could Be Time To Build Your Dream Home. | Simplifying The Market

While today’s supply of homes for sale is still low, the number of newly built homes is increasing. If you’re ready to sell but have held off because you weren’t sure you’d be able to find a home to move into, newly built homes and those under construction can provide the options you’ve been waiting for.

The latest Census data shows the inventory of new homes is increasing this year (see graph below):Looking To Move? It Could Be Time To Build Your Dream Home. | Simplifying The MarketWith more new homes coming to the market, this means you’ll have more options to choose from if you’re ready to buy. Of course, if you do consider a newly built home, you’ll want to keep timing in mind. The supply shown in the graph above includes homes at various stages of the construction process – some are near completion while others may be months away.

According to Robert Dietz, Chief Economist and Senior VP for Economics and Housing Policy for the National Association of Home Builders (NAHB):

28% of new home inventory consists of homes that have not started construction, compared to 21% a year ago.”

Buying a home near completion is great if you’re ready to move. Alternatively, a home that has yet to break ground might benefit you if you’re ready to sell and you aren’t on a strict timeline. You’ll have an even greater opportunity to design your future home to suit your needs. No matter what, your trusted real estate advisor can help you find a home that works for you.

Bottom Line

If you want to take advantage of today’s sellers’ market, but you’re not sure if you’ll be able to find a home to move into, consider a newly built home. Let’s connect today so you have a trusted real estate advisor to guide you through the sale of your house and discuss your homebuying options.

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New Home Purchase Applications Down in September as Loan Size Rises

Mortgage applications for new home purchases decreased 16.2% YoY. Compared to August 2021, applications decreased by 4%., according to the Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for September 2021. This change does not include any adjustment for typical seasonal patterns.

Key details:

MBA predicts new single-family home sales were running at a seasonally adjusted annual rate of 843,000 units in September 2021, based on data from the BAS. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors.

The seasonally adjusted estimate for September shows a decrease of 3.5% from the August pace of 874,000 units. Unadjusted, MBA predicts there were 66,000 new home sales in September 2021—down 7% from 71,000 new home sales in August.

By product type:

– Conventional loans composed 75.1% of loan applications
– FHA loans composed 13.9%
– RHS/USDA loans composed 0.5%
– VA loans composed 10.5%

The average loan size of new homes increased from $406,922 in August to $408,522 in September.

The takeaway:

“New home sales purchase activity was weaker in September, and the average loan size rose to another record high, as homebuilders continue to grapple with rising building materials costs and labor shortages. The survey-high average loan size of $408,522 is evidence of higher sales prices from these higher costs, as well as the shift in new construction to larger, more expensive homes,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting, in a statement. “The estimated pace of new home sales decreased 3.5% last month after a strong August reading, but the two-month sales pace is at its strongest since January 2021.”

The post New Home Purchase Applications Down in September as Loan Size Rises appeared first on RISMedia.

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