REAL ESTATE HEADING IN THE RIGHT DIRECTION

The housing market has taken a great turn toward recovery over the last few years. The opinions of the American public toward real estate took longer to recover, until recently. For the first time since 2006, Americans have an overall positive view of real estate, giving the industry a 12% positive ranking in a Gallup poll. Americans were asked to rate 24 different business sectors and industries on a five-point scale ranging from "very positive" to "very negative." The poll was first conducted in 2001, and has been used as an indicator of “Americans’ overall attitudes toward each industry”.



Americans’ view of the real estate industry worsened from 2003 to the -40% plummet of 2008.  Gallup offers some insight into the reason for decline:

Prices Dropped

“In late 2006, real estate prices in the U.S. began falling rapidly, and continued to drop. Many homeowners saw their home values plummet, likely contributing to real estate's image taking a hard hit.”

Housing Bubble

“The large drops in the positive images of banking and real estate in 2008 and 2009 reflect both industries' close ties to the recession, which was precipitated in large part because of the mortgage-related housing bubble.”

Bottom Line

“Although the image of real estate remains below the average of 24 industries Gallup has tracked, the sharp recovery from previous extreme low points suggests it is heading in the right direction.”

Should I Wait Until Spring to Sell?

Traditionally the thought process is to wait until spring to sell a home. The thinking is there are more buyers which will result in higher prices. The often overlooked part of that equation is that there are more homes for sale as well.

I do not know what spring 2015 will bring, (my darn crystal ball is on the fritz again.) But I do know that my recent listings have sold quickly, there are buyers looking NOW. So it might be worth selling now instead of waiting. My last 3 listings have all received and accepted offer within one week.

The Difference Between a Home's Cost vs. Price

This is a similar theme to what I have posted many times in the past, but it is worth repeating.





As a seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first time or repeat buyer, you must not be concerned only about price but also about the ‘long term cost’ of the home.

Let us explain.

There are many factors that influence the ‘cost’ of a home. Two of the major ones are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.

What will happen in 2015?

A nationwide panel of over one hundred economists, real estate experts and investment & market strategists project that home values will appreciate by almost 4% by the end of 2015. Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30-year fixed mortgage rate will appreciate to 4.5% by the end of 2015.

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today: