Where Are Home Prices Headed Over the Next 5 Years?
Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.
Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.
The results of their latest survey:
Home values will appreciate by 4.5% over the course of 2016, 3.6% in 2017 and about 3.2% in the next two years, and finally 2.9% in 2020 (as shown below). That means the average annual appreciation will be 3.5% over the next 5 years.
The prediction for cumulative appreciation increased slightly from 24.7% to 26.3% by 2020. The experts making up the most bearish quartile of the survey are still projecting a cumulative appreciation of 11.1%.
Bottom Line
Individual opinions make headlines. We believe the survey is a fairer depiction of future values.
Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys to ensuring you get the highest price possible.
1. Price it a LITTLE LOW
This may seem counterintuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. In that way, the seller will not be fighting with a buyer over the price, but instead will have multiple buyers fighting with each other over the house.
Realtor.com, gives this advice:
“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”
2. Use a Real Estate Professional
This too may seem counter intuitive. The seller may think they would net more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.
Research posted by the Economists’ Outlook Blog revealed that:
“The median selling price for all FSBO homes was $210,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $151,900. However, homes that were sold with the assistance of an agent had a median selling price of $249,000 – nearly $40,000 more for the typical home sale.”
Bottom Line
Price your house at or slightly below the current market value and hire a professional. That will guarantee you maximize the price you get for your house.
Real Estate Values Today Compared to Pre-2008 Peak
This housing market has many people talking about home values; where they are and where they are headed. It’s also interesting to look back and see how home prices compare to values prior to the housing crisis.
Every quarter, Freddie Mac releases their House Price Index. The index usually provides monthly home values for:
the nation as a whole
each of the 50 states
367 metropolitan statistical areas
This quarter, the report also included a look at today’s home values as compared to Pre-2008 values. Here is a graphic that breaks down the numbers on a state-by-state basis:
The National Association of Realtors’ most recent Existing Home Sales Report revealed that home sales were up rather dramatically over last year in five of the six price ranges they measure.
Homes priced between $100-250K showed a modest increase at 3.4%. This not only points to the lower inventory of homes available for sale in this price range but also speaks to the overall strength of the housing market.
Sales of homes over $250,000 increased by double digit percentages with sales in the $750,000- $1 million range showing the largest increase, up 16.7%!
As prices in many markets continue to accelerate, it is no surprise to see the percentage of homes in the higher price ranges increasing.
Here is the breakdown:
What does that mean to you if you are selling?
Houses are definitely selling. If your house has been on the market for any length of time and has not yet sold, perhaps it is time to interview other agents to see what can be done differently to market it. Contact us – we’d love an opportunity to show you why are sellers are selling in about half the time and for about 4% more (compared to the average agent).
Thinking of Selling Your House? Pick the Right Agent!
Today, more and more sellers are stepping back, taking a look at the advice real estate professionals give them, and asking themselves whether they can trust that advice. And that is exactly what they should do.
The most important question you can ask when you are choosing a real estate agent is whether you feel you can trust them. You must know that they’re giving you great advice, and that they’re going to be able to help you accomplish your family’s goals. You must trust your listing agent enough to allow them to:
Handle the liquidation of possibly the largest asset your family has
Help set the market value of that asset (get the price right)
Set the timetable for the liquidation of that asset
Set a fair fee for the services required to liquidate that asset
All four of these require a tremendous amount of trust. They’re going to sell your prized possession, set its value, set a time schedule as to when your family will be able to move, and determine the fee that you’re going to pay to get those three things accomplished.
You have to trust your agent enough to allow them to help you and your family reach your dreams.
Whether you’re a grandfather up North looking to move to Florida to spend your later years with your grandkids, or a young person who wants to take that job in San Francisco but first has to get your house sold in Chicago, you need an agent you can trust to help you move on with what’s important.
According to the latest Census Bureau Report, sales of newly constructed homes soared to new heights in June to a seasonally adjusted rate of 592,000. This marks the highest annual rate in 8 years.
Trulia’s Chief Economist, Ralph McLaughlin had this to say:
“New home sales jumped sharply in June, and marked the best month since February 2008. This is a continued sign that demand for homes remains solid and aptly reflects increasing homebuilder confidence.”
Sales have been climbing consistently over the last six months as shown in the graph below.
One of the many reasons why many homeowners turn to the new homes market to find their dream home is due to the lack of existing homes for sale. As we have mentioned before, buyer demand is outpacing the supply of homes for sale at record rates.
Bottom Line
If you are a homeowner who is debating listing your home for sale this year, now may be the time. Let’s get together to help you take advantage of the buyers that are ready, willing and able to buy in your area.
Gap Between Homeowner’s & Appraiser’s Opinions Narrows Slightly
In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. One major challenge in such a market is the bank appraisal.
If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the price when performing the appraisal for the bank.
Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.
The gap between the homeowner vs. appraiser’s opinion has started to head in the right direction (closer to even), as June saw a slight decrease from May’s -1.95% to -1.89% nationally.
Homeowners in the western part of the country, however, have been pleasantly surprised as their homes have appraised higher than they expected. Denver received its highest HPPI last month as homes came in an average of 3.28% higher than the homeowner believed it would. Nine of the twelve metro areas that had a positive HPPI last month were located in the west.
Quicken Loans’ Chief Economist, Bob Walters explains:
“The hot housing markets along the West Coast are growing quicker than owners realize, giving way to higher than expected prices for buyers and more home equity for existing owners.
On the other hand, the housing markets are more balanced in the East and Midwest, leading owners to be slightly over-enthusiastic about their home’s appreciation.”
Bottom Line
Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to talk about what’s happening in our area.
If you are debating listing your house for sale this year, here is the #1 reason not to wait!
Buyer Demand Continues to Outpace the Supply of Homes For Sale
The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage:
“With demand holding firm and homes selling even faster than a year ago, the notable increase in closings in recent months took a dent out of what was available for sale.
Realtors are acknowledging, with increasing frequency lately, that buyers continue to be frustrated by the tense competition and lack of affordable homes for sale in their market.”
The latest Existing Home Sales Report shows that there is currently a 4.6-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and 5.8% lower than June 2015.
The chart below details the year-over-year inventory shortages experienced over the last 12 months:
Anything less than a six-month supply is considered a “Seller’s Market”.
Bottom Line
Let’s get together and discuss the supply conditions in your neighborhood to be able to assist you in gaining access to the buyers who are ready, willing and able to buy now!
Is Now the Right Time to Put Your House on the Market …or Not?
Last week, the National Association of Realtors(NAR) released their Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings. The report revealed that this May’s numbers weren’t quite as good as the year before:
“With last month’s decline, the index reading is still the third highest in the past year, but declined year-over-year for the first time since August 2014.”
The mainstream media ran headlines highlighting that the index had dropped for the first time in two years. Many read this as an indication that the housing market must be slowing down.
If you were thinking that now may be the perfect time to put your house on the market, these reports may have caused you some concern. We want to alleviate that concern today.
Though it is true that the index dropped in last month’s report, let’s take a closer look at the numbers. Below is a graph of the index since January 2014. We can see that the index has increased every month over the last eighteen months, leading up to this past May.
Lawrence Yun, Chief Economist at NAR, explained that it wasn’t a slowing of the market that caused the index to slip, but instead a lack of housing inventory:
“Total housing inventory at the end of each month has remarkably decreased year-over-year now for an entire year. There are simply not enough homes coming onto the market to catch up with demand.”
Here is a graph depicting the situation Yun was referencing:
Bottom Line
Did the latest numbers from the Pending Home Sales Index cause you to question if now is a good time to put your house on the market? If anything, it indicated the exact opposite: that this may be the perfect time to sell!!
Buyers: How to leverage the little time you have when viewing a new home for sale
Shadow Valley (Ogden) home for sale
Layton home for sale with main-level mother-in-law apartment/suite
Much more…
Want to know what your house is worth in today's market, find out now! Yes, it's free!
Video Transcript
And as we’re moving into the middle of March, we can see the market is heating up with new listings jumping up there. We also have new solds on an upward trend, and for now prices are holding steady, but I expect as we get more into the spring and summer market, we’ll see an increase there like we did a year ago. So now is a great time to be out there buying and selling. So let’s give you some great tips on how you can win as a buyer or a seller during the showing phase of the process.
Well, let’s talk about buyers. The first thing that buyers can do to help them be productive during the showing phase is to first get pre-approved. When you have that pre-approval letter, you know that you don’t have any issues with financing, and you’re ready to go shopping. You know your price range, and when you present that letter to a seller with your offer, it’s like giving them cash because you are ready to go.
The second most important thing a buyer can do is drive by the homes first before you set up a showing. That way you can check out the neighborhood, and you can check out the yard, you can check out the outside of the home and make sure when you pull up in front of it to see the inside, you already know it’s a home you would love to live in. And the third thing that a buyer can do to make his showing period productive is to look at multiple homes on the same day. That’s a better use of your time, and it allows you to better compare features from home to home when you are seeing them back-to-back.
Well, now let’s talk about what sellers can do to make the showings most productive for them. Sellers, of course, have the challenge of living in the house most of the time at the same time we’re trying to show it and sell it. So some great tips to make it easy to get ready for short-notice showings is to always hang up coats and book bags when you come in the door and have the whole family do the same. Have everybody take off their shoes at the door so they are not tracking extra dirt through the house, and have a drawer designated in the kitchen where you’re going to throw the keys and paperwork and all that miscellaneous stuff that accumulates on the countertops. That way they are always clean and ready to be shown. We have a lot more great tips for you too, so get a hold of us, and we’ll give you our sheets of great tips for showings.
Well, let’s take a look at some new homes on the market. This first home is in the popular Shadow Valley neighborhood in South Ogden. It’s over 4,500 square feet, four bedrooms, three baths, three-car garage, and gorgeous finished throughout. Lots of great living space here that you can use according to your lifestyle and lots of great updates like granite countertops, new furnaces, new air conditioners, and more. This is a well-maintained home, and you want to check this out while it lasts.
And let’s take a look at another one. This is a great home in Layton; 7 bedrooms, 5 baths, and a full mother-in-law suite on the main level, so mom can have single-level living right on the main floor. Mom’s apartment has its own kitchen and its own laundry room and lots of great finishes just like the main home. There’s two fireplaces to cozy up to, and you’re on almost 0.4 acres at the end of a cul-de-sac, so great space inside and out. Come check this one out today.
Well, that wraps up this week’s market update. Feel free to give us a call, a text, or an email if you need more information or have questions on anything, and remember that we’re here to help you buy a home, sell a house, or invest in real estate, so refer us to all of your friends and neighbors, and we’re happy to help them too. Until next week, keep living smart.
Want To Send a Seller to Us? Here’s How To Refer to Us – A Great Utah REALTOR Team Thank you for trusting our team to help you with your real estate needs. We’d love to help your family, friends … Continue reading →
This video gives you an explanation of what the closing costs are when selling your property. This will help you prepare so you’re not surprised at the closing. Ever wonder what costs are paid by the seller and which are paid by the seller? Ann covers that too. Plus get a peek at some new homes on the market in Roy and Liberty (Ogden Valley).
Want to know what your house is worth in today's market, find out now! Yes, it's free!
Video Transcript
Hello everyone! This is Ann Zieve with the Northern Utah Home Team and Keller Williams Success Realty here to give you my weekly market update, and today we’re going to talk about closing costs, but first let’s take a look at the market and then we’ll look at some new homes on the market. Here we have the graph of our rolling market statistics, and as we’re entering into February you can see that the number of new listings is starting to increase, and if you look at where they were a year ago, it’s about at the same point. We had the dip a year ago, and we had the same dip this year, so that’s just a seasonal thing, and when you look at new solds, you can see that those are still depressed, and they were depressed a year ago too. So again, another seasonal dip, but we will expect to see both houses selling and houses getting listed increase in the months ahead, and we can see that price is staying pretty much steady.
Well, let’s take a look at what closing costs are all about for all those sellers and buyers who will be entering the market. So one thing to consider when you are buying or selling a home are closing costs. Sellers are usually aware that they will have to pay a realtor’s commission. However, sometimes they don’t take into account other closing costs they might have, and then they are surprised when they don’t make as much money on the sale of their house as they had expected. Buyers are usually wanting to buy the biggest, nicest home they can with their money. However, if they don’t set aside money to cover closing costs, they will also be surprised at closing. So what are typical closing costs? Well basically they are the cost to pay everyone involved in helping you to sell your house or to buy a home. Realtor commissions are the most well-known closing costs. Also, if a buyer is getting a loan, they are pretty aware that there are going to be loan costs such as origination fees, down payments, points, etc.
Did you also know that the title company that will be closing the cost of the loan and the transaction will also have costs such as recording fees, document prep fees, and other fees? And also title insurance is another closing cost that both sellers and buyers will have. The seller will buy a title insurance policy for the buyer to insure that they are passing clear title, and the buyer, if they are getting the loan, will buy a title insurance policy for their lender to insure that the lender is getting a clear title. So in a buyer’s market when there are more sellers than buyers, it’s pretty typical for buyers to ask the seller to pay for their closing costs, and they seller is usually pretty willing to do so. However, in a seller’s market which we had at the end of the last year where there were more buyers than sellers, sellers are less likely to pay for the buyer’s closing costs, and buyers need to plan accordingly if they want to buy a great home. A knowledgeable realtor can help you anticipate these costs so that you can factor them into your buying and selling plans to make sure you’re not surprised at the end. Contact us for more information and to help you in understanding closing costs.
So let’s take a look at some new homes on the market. First I want to show you this incredible home in Roy. It’s over 8,000 square feet on almost a half-acre. It has a four-car garage, four bedrooms, four bathrooms, three kitchens, six family rooms, a formal dining room, a library, and the list goes on and on; an elevator. It has stained-glass windows. It has a huge master bedroom suite with a loft, and this home is just an incredible home to see if you’re looking for something in Roy in the upper price range. And here’s another wonderful new listing. This one is in Eden. It’s horse property with over 3 acres. It has horse pastures, a barn with electricity, and alfalfa fields. It has a beautiful, redone kitchen that opens up into a huge family room area. There’s four bedrooms in this house as well as three baths and two family rooms and just lots of elbow room inside and out if you’re looking for a great horse property in the Eden Valley among all the mountains and close to all the great recreational activities. So that wraps up this week’s market update. If you have any questions or need more information, give us a call, and we’re happy to help you buy a home, sell a house, or invest in real estate. Until next time, keep living smart.
This week’s video gives you an overview of what’s in our House Seller’s Guide. Call, text or email for the full guide with great tips to help you get the most money for your property, as fast as possible.
Want to know what your house is worth in today's market, find out now! Yes, it's free!
Video Transcript
Hello everyone! This is Ann Zieve with the Northern Utah Home Team and Keller Williams Success Realty here to give you my weekly market update, and today I am going to give you a real treat because I am going to share with you my smart tips on selling your house. So let’s get started.
If you’re looking to sell your house, you’re probably asking yourself the following questions. What can I expect? How can I attract the most buyers? And, is now the right time to sell? Well, we’re going to talk about these and other questions today. We’ve personally sold over 170 homes since 2002, so we think like sellers, not realtors. We know that selling your house is one of the biggest and most important financial transactions you’ll make. We can help you make the process smooth and quick, and we strive to get you the most money possible from the sale.
Today we’ll go through a few tips, and at the end, I will tell you how to get a copy of our Smart Seller Guide. So why sell now? Well, it is a seller market in many areas in Utah. The demand for well-priced houses in good condition is high, and there are lots of buyers taking advantage of low interest rates and affordable prices. In fact, we’re seeing multiple offers in many situations. The smart seller knows about his competition and his local market. So why would you want to hire a professional like us to sell your house?
Well, our job is to sell your house and negotiate on your behalf. Our number one job is to protect you, and we can do that because we know real estate and we have the experience of over 170 transactions under our belt. One of the biggest parts of our job is to market to buyers and to agents who have buyers. We know what buyers are looking for, and we know how to get your message about your house to them. We have developed a 57 point marketing plan that is second to none. For example, our marketing plan includes aerial photos and videos. Now how many realtors can say that? Your job is to make your house attractive to the buyer, and we could give you pointers that fit your budget, your skills, and your time availability. Price does matter, and we have studied to understand what houses are selling for. We also take into account the influence of other factors like the condition of your house and the competition.
We do all of this to strive to get you the most money for your house. The price we recommend is designed to bring you offers, and when they come, we’re by your side to provide guidance and our experience and knowledge to help you get as much as you can from your house. It takes the average real estate transaction one to two months to close. Now wouldn’t you like someone by your side watching that things are moving smoothly and addressing issues as they come up so you can keep your attention on your family and the other things that need your attention? I think you’re starting to see the advantage of having a professional work for you. We would encourage you to interview multiple realtors. Few will bring the following benefits to you like we will. We have an easy exit listing program that allows you to cancel at any time for any reason.
Our guaranteed sold program says that we’ll sell your house in 59 days or we’ll sell it for free, and our communication guarantee says we’ll touch base with you at least once a week, or you can cancel the listing immediately. We also have a smart seller program that allows you to market the house for sale by owner, while we’re also marketing it, and if you bring the buyer first, you don’t have to pay us a commission. Need more proof that we’re different and better than most realtors? Learn what our clients have said then give us a call, a text or an email, and set up an interview with us to come talk to you about getting your house sold. Now that is smart. Get in touch with us also if you want a copy of this Smart Sellers Guide that I just went through, and remember, we’re here to help you sell your house, buy a house, or invest in real estate. Until next time, keep living smart.
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