The housing market keeps sailing along. The only headwind that could take it off course is the lack of inventory for sale. The National Association of Realtors (NAR) reports that there were 410,000 fewer single-family homes for sale this March than in March of 2020. The key to continued success in the residential housing market is for more listings to come on the market. However, many homeowners are concerned that selling their homes could be challenging for several reasons.
Recently, Homes.com released the findings of a survey that identified these concerns, as well as what it will take for homeowners to feel comfortable selling their houses. Here are the four major homeowner concerns and a quick explanation of what’s actually happening in the housing market today.
1. Homeowners don’t know if they’ll be able to secure their next home before selling.
In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on the ability to award benefits or eliminate costs on the other side.
In today’s market, buyers have compelling reasons to purchase a home now:
To own a home of their own
To buy before prices continue to appreciate
To secure a mortgage at a historically low rate, while they last
These buyer needs give the seller tremendous leverage. Most already realize this leverage enables the homeowner to sell at a good price. However, this leverage may also be used to negotiate time to find their next home. The homeowner could sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller finds a new home or has one built.
This gives the buyer what they want while also giving the seller what they need. It’s a true win-win negotiation.
2. Homeowners don’t know if their current home will sell for the asking price or top market price.
This is the perfect time to maximize profits while selling a house. NAR just released a study showing that bidding wars are at an all-time high. The study reveals that when comparing the first quarter of last year to the first quarter of this year, the number of offers on homes for sale doubled from an average of 2.4 to 4.8 offers.
Whenever there’s a bidding war, the price of the item for sale escalates. Bloomberg recently reported:
“For the first time ever, the average U.S. home is selling for above its list price.”
If a seller is looking for a top-dollar sale, there’s no better time to sell than right now.
3. Homeowners don’t know if they will get an offer without their home requiring work or updates.
Again, leverage is the greatest strength a seller has in this market. Due to the lack of homes for sale, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after.
A recent post on whether or not to renovate before selling notes:
“It may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.”
If a seller is worried about doing work or updates on their home, they must realize that today’s historically low inventory likely renders these projects less critical to the sale of the house.
4. Homeowners don’t know if they can have a quick closing process.
When speed is important, there are two points sellers should look at:
“Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. Eighty-three percent of the homes sold in March 2021 were on the market for less than a month.”
Eighteen days is fast, and it’s a new record. Here are the days the average house is on the market in each state:Regarding the time it will take to close the transaction, all-cash sales accounted for 23% of all home purchase transactions in March. All-cash sales can usually be closed in thirty days.
“Time to close all loans decreased in March. The average time to close a purchase fell to 51 days, down from 53 the month prior.”
If you’re looking for a quick closing process, there’s never been a market in which the two-step process (finding a buyer and closing the deal) has taken less time.
Selling your house can be daunting, especially in a fast-paced market. However, the fact that we’re in such a strong sellers’ market clearly eliminates many common concerns. Let’s connect today so you can learn more about the opportunities for homeowners who are ready to sell.
The real estate market was on fire during the second half of 2020. Buyer demand was way up, and the supply of homes available for sale hit record lows. The price of anything is determined by the supply and demand ratio, so home prices skyrocketed last year. Dr. Lynn Fisher, Deputy Director of the Federal Housing Finance Agency (FHFA) Division of Research and Statistics, explains:
“House prices nationwide recorded the largest annual and quarterly increase in the history of the FHFA Home Price Index. Low mortgage rates, pent up demand from homebuyers, and a limited housing supply propelled every region of the country to experience faster growth in 2020 compared to a year ago despite the pandemic.”
Here are the year-end home price appreciation numbers from the FHFA and two other prominent pricing indexes:
Does the thought of moving make you want to run for cover? Are you overwhelmed with “stuff”? Are you tired of carrying the expenses of a house full of empty rooms? Downsizing can improve the quality of your life! This is a great opportunity to meet a panel of 5-star professionals. Garner great tips breaking down the process into manageable bites.
According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the inventory of homes for sale this year compared to last year has increased for the last four months, all while sales of existing homes have slowed compared to last year’s numbers.
For over three years leading up to this point, the exact opposite was true; Inventory dropped as sales soared.
NAR’s Chief Economist Lawrence Yun shed some light on what could be contributing to this shift,
“This is the lowest existing home sales level since November 2015. A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”
Let’s take a deeper look:
Since January, 30-year fixed mortgage interest rates have increased nearly a full percentage point (from 3.95% to 4.9%). Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association are all in agreement that rates will continue to increase to about 5.2% over the next 12 months.
“The rise in [mortgage] rates paired with this very strong price appreciation absolutely is slowing housing,”saidFannie Mae’s Chief Economist Doug Duncan.
Even though rates are higher than they’ve been in a decade, they still remain below the average for the 1970s, 80s, 90s, and 2000s!
Mismatch of Inventory
Elizabeth Mendenhall, President of NAR, said it best, “Despite small month over month increases, the share of first-time buyers in the market continues to underwhelm because there are simply not enough listings in their price range.”
Prices of starter and trade-up homes have appreciated faster than their higher-priced counterparts. Over the last 5 years, the lowest-priced homes have appreciated by 47% while the highest-priced homes have appreciated by only 24%.
According to the Institute of Luxury Home Market’s Luxury Market Report, the $1M-and-up price range is now experiencing a buyer’s market. This means that supply (inventory) has finally caught up with demand and buyers are in the driver’s seat when it comes to negotiations. Additionally, many listings in this price range have experienced price cuts in order to entice buyers to put in offers.
Although not fully to blame for the national shortage in sales and inventory, natural disasters like Hurricane Florence, Hurricane Michael, and the wildfires on the West Coast have certainly had an impact.
Additional inventory coming to market could help normalize the housing market and allow incomes to catch up to home prices. For more information about sales and inventory in our area, let’s get together so we can help you make the best decision for you and your family.
To sell your home fast, you have to stand out among the crowd. Having a great home isn’t enough. It has to look and feel perfect when people tour it. Bottom line: proper staging of your home can lead to a quicker sale. Here’s how to do it.
Take down those family photos It’s not so much that a photo or two of you and your family will turn off prospective buyers. It’s more that for a buyer to want to make a quick offer, they really need to be able to envision themselves living in the home as soon as possible. Having too many personal effects hanging around hampers this vision. So take down your personal photos. Anything that could be seen as inflammatory like strong religious or political decor must go too. Realtor.com suggests filling these now-empty spaces on your walls with mirrors.
Go gender-neutral You’ll be hosting all types of people in all types of life situations at your open house – single men, single women, families, families with kids, etc. It’s vital that your decor – most importantly that in the bedrooms – stay gender-neutral. Think neutral paint colors like white, brown, and gray. Your decor shouldn’t seem too masculine or too feminine. For more on balancing the sexes in your decor, check here.
White = clean Though white furniture and carpeting will show dirt, when it comes to your bathrooms and kitchen – think white. White is associated with cleanliness and sterility, and if you paint your bathrooms white and install white tile and fixtures, it will make prospective buyers feel like they are in a super-clean area. Of course, you also have to deep clean for real. A coat of paint can’t hide true grime.
Make your pets disappear It’s obvious that you should get you dogs/cats out of the house before you show it. But just because Felix and Fido are gone, it doesn’t mean their presence isn’t noticeable. Proper staging of your home should include a complete and total eradication of all things pet (or at least as much as possible). Pet odor is hard to get out, but shampooing carpets/furniture and spot-treating can help. Try some of these tricks as well.
Beyond worrying about odor, you should remove any other traces of their existence – bowls, leashes, toys, food, etc. You love your pets, but to a potential homebuyer they can be a huge turn-off.
Focus on curb appeal A spectacular interior will rarely make up for a shabby exterior. Would you be excited about making a quick, fair offer on a home with a drab or dilapidated front facade? Curb appeal is just as important – if not more so – as any other aspect of home staging. Through a combination of deep cleaning, landscaping, and painting, you can make that first impression shine. Houzz suggests these tasks to make your exterior pop: “power wash siding and walkways; hang easy-to-read house numbers; plant blooming flowers and fresh greenery; add fresh sod as needed; wash front windows; repaint or stain the porch floor.”
Staging your home to better elicit a quick offer isn’t some sort of trickery. It’s simply presenting your home in the best light possible – showing prospective buyers your home at its full potential. If your home is nice and solid, it will sell eventually. But if you don’t want it to sit around on the market for months, you should focus on making a huge splash at your open house.
Suzie Wilson is an interior designer with more than 20 years experience. What started as a hobby (and often, a favor to friends) turned into a passion for creating soothing spaces in homes of every size and style. While her goal always includes making homes look beautiful, her true focus is on fashioning them into serene, stress-free environments that inspire tranquility in all who enter. The Ultimate Guide to Prepping Your Home for an Open House is filled with tips, tricks and other advice based on Suzie’s years of experience in interior home design that will set you up for success.
The hardest part of selling your home isn’t settling on an asking price or dealing with hesitant buyers. As a seller, your biggest headache is keeping your house in show-ready condition from start to finish. And if you have a pet, that challenge is only multiplied. How in the world can you keep your floors spotless when you have a furry pet running about? It’s easier than you think when you follow our advice.
Most buyers don’t want to see signs of pets in a home. In order to maximize your home’s appeal, it’s important to detail your home in a way that masks your pets’ presence.
The first step is a deep clean. It’s easiest if you hire this job out to a professional cleaning service, however, it can also be done DIY with some tool rentals and a few days’ time. Clean floors, wash linens, vacuum couches and spot-treat stains on furniture. Dust and lightly wash walls, trim, and ceiling fans before moving on to the interior of closets and cabinets — you never know where pet hair and odors are lingering. Outside, clean the yard of pet waste, fill holes, and repair landscaping damaged by your pet. Start the process several weeks before listing your home so bare patches of lawn have time to regrow.
Next, turn your eyes to the floors. Carpeting traps odors and stains from pet accidents and muddy paws. It’s recommended to hire a professional carpet cleaning service, but in homes with minimal carpet damage, a rented carpet cleaner from a local home improvement store may be adequate. Before using the carpet cleaner, spot treat stains following instructions from The Humane Society of the United States.
If you have hardwood, take a close look to spot scratches from dog and cat nails. Shallow scratches can be removed using steel wool, then sealed with wax and buffed. As The Spruce explains, deeper scratches require a color-matched wood filler. If pets have urinated on wood floors, leaving dark stains, replace the damaged planks before listing your home. Not only are they unsightly, but the urine-stained wood traps unpleasant pet odors.
To keep the house clean while it’s on the market, consider boarding your pet or asking a friend or family member to provide temporary housing until your home is sold. If that’s not possible, restrict your pet to rooms least vulnerable to new messes, sweep floors daily, keep litter boxes clean, and groom and bathe your pet to minimize shedding and odors. Creating a clean-up station by the door and placing slipcovers over furniture prevents dogs from tracking messes indoors.
Finally, ensure pets are out of the house when prospective buyers visit. Crating pets or leaving them in the backyard isn’t a viable option. Serious buyers want to see every area of your home, but an animal’s presence may dissuade some buyers. Instead, arrange for a pet sitter or walker to take your pet during showings, and pack up your pet’s items so they’re out of sight.
After you move into your new home, the next challenge is preventing damage so it’s easier to sell the next time around. That’s especially true if you’re in the market for a vintage home. A popular choice among today’s buyers, vintage homes in Newton come in at a median price of $1.28 million. Since buyers of vintage homes cherish original details like hardwood floors and moldings, it’s more important than ever to prevent your pets from gnawing or scratching on things they shouldn’t. Often, destructive behavior is a sign that a pet is under-exercised. Consider how you can increase pets’ daily exercise so they’re more relaxed indoors and keep nails trimmed short to prevent flooring damage.
It’s easy for pet owners to be blind to the messes their companions create. However, buyers are sure to notice scratches in the floors and lingering pet odors. Make sure your pets don’t impact the success of your sale by carefully cleaning and fixing up your home before you list.