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:

Existing Home Sales & Prices

To Stage or not to Stage?

Home Staging Can Help Sell Home for More, Realtors® Say

WASHINGTON (January 27, 2015) – Most homeowners know it is important to keep a home clean, bright and free from clutter while it is on the market for sale. But sometimes, Realtors^® say, taking the extra step to stage a home can make a difference in how a buyer values it and the price a seller might get for it, according to the National Association of Realtors^® 2015 Profile of Home Staging.

“Realtors^® know how important it is to have a home in the best shape possible when showing it to prospective buyers,” said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Arkansas. “At a minimum, homeowners should conduct a thorough cleaning, haul out clutter, make sure the home is well-lit and fix any major aesthetic issues. Another option is staging a home, which Realtors^® often suggest to sellers to help prospective buyers better visualize themselves in the home and could modestly increase the home’s value for both the buyer and seller.”

The report, the first of its kind from NAR, found that 49 percent of surveyed Realtors^® who work with buyers believe staging usually has an effect on the buyer’s view of the home. Another 47 percent believe that staging only sometimes has an impact on a buyer’s view of the home only. Only 4 percent of Realtors^® said staging has no impact on buyer perceptions.

Realtors^® on the buyer side believe that staging makes an impact in several ways; 81 percent said staging helps buyers visualize the property as a future home, while 46 percent said it makes prospective buyers more willing to walk through a home they saw online. Forty-five percent said a home decorated to a buyer’s tastes positively impacts its value; however, 10 percent of Realtors^® said a home decorated against a buyer’s tastes could negatively impact the home’s value.

From the seller side, a majority of Realtors^® utilize staging as a tool in at least some instances. Just over a third of Realtors^® (34 percent) utilize staging on all homes, while 13 percent tend to stage only those homes difficult to sell, and another 4 percent will do so only for higher priced homes. The median cost spent on staging a home is $675. Sixty-two percent of Realtors^® representing sellers say they offer home staging service to sellers, while 39 percent say the seller pays before listing the home.

Realtors^® representing both the buyer and seller agreed on two major points in the report—which rooms should be staged and the change in dollar value a buyer is willing to offer for a staged home compared to a similar not-staged home. Realtors^® ranked the living room as the number one room to stage, followed by a kitchen. Rounding out the top five rooms were the master bedroom, dining room and the bathroom.

Realtors^® believe that buyers most often offer a 1 to 5 percent increase on the value of a staged home (37 percent from Realtors^® representing sellers and 32 percent from Realtors^® representing buyers). Additionally, 22 percent of Realtors^® representing sellers and 16 percent of Realtors^®representing buyers said the increase is closer to 6 to 10 percent.

“Working with a Realtor^® gives buyers, sellers and investors the advantage they need to succeed in today’s market, as they know what buyers want and how to best market and stage a home for sale,” Polychron said. “While many factors play into what a home is worth and what buyers are willing to pay for it, staging is an excellent tool that can be used to give a home a little extra push for sellers. Staging isn’t used by every Realtor^® in every situation, but the impact it may have and the value it can bring is clear to both home buyers and sellers.”

The National Association of Realtors^®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

 

WHY HAVE INTEREST RATES DROPPED?

Why Have Interest Rates Dropped?  Posted: 27 Jan 2015 04:00 AM PST The headlines agree mortgage interest rates have dropped substantially below initial projections. Many who are considering purchasing a home, or moving up to their dream home, might think that they should wait to buy, because rates may continue to fall. A recent article on the Economists’ Outlook blog by the National Association of REALTORS® (NAR) provides insight into one major factor in the decline in interest rates, the crude oil price. “As of January 5, 2015, the U.S. Energy Information Administration (EIA) reported that the price of regular gasoline was $2.20/gallon, the lowest since gas prices peaked to about $ 4/gallon in May 2011.” You may have noticed that filling your gas tank has become substantially less expensive in recent months. A welcome change from the close to $5 a gallon that many Americans were paying this time last year. The average US household is projected to save around $550 in 2015. So what does that have to do with Interest Rates? NAR explains the correlation like this: “Lower oil prices mean lower inflation rate, which pushes down mortgage rates.” Based on Freddie Mac’s weekly mortgage survey as of January 22, 2015, the 30-year fixed rate averaged 3.63% and the 15-year fixed rate averaged 2.93%. “The decline in oil prices is generally positive to households by way of the gas savings and lower mortgage payments. That savings will boost consumer spending in other areas. But there may be some layoffs in oil-producing states.” How long will rates stay low? No one really knows how long oil prices will continue to support low mortgage rates. In a New York Times article, the author points to the fact that “adding hundreds of billions of dollars to consumer spending” could start to have a “counter effect” on rates as the economy continues to strengthen. “If firms start hiring again, and wages increase — that’s when the level of all interest rates in the U.S. would increase.” Don’t wait too long The low interest rates we are currently experiencing are not going to stay around forever. The current projections from Freddie Mac, Fannie Mae, NAR and the Mortgage Bankers Association all agree that interest rates will increase to between 4.3-5.4% by the end of 2015. Bottom Line NAR reports: “At the median home price of $205,300, a 0.75 percentage point drop in mortgage rates will yield savings of about $1,000 annually.” If you are in a position to buy a home make sure that you meet with a local real estate professional with their finger on the pulse of what’s going on in the market. Don’t let a delay in purchasing impact your family’s financial future.

 

Idaho in Top 10 States for Inbound Moves in 2014

Since 1977, United Van Lines has tracked state-by-state household migration patterns annually in 48 states and Washington, D.C. Basing their research findings on the household moves their company facilitates, United identifies which states have the highest inbound moves and the highest outbound moves each year.

In their 2014 survey, United determined that Idaho ranked number 10 in the states with the most inbound moves. The states that ranked higher than Idaho, number 1 to number 9, were Oregon, South Carolina, North Carolina, Vermont, Florida, Nevada, Texas, District of Columbia, and Oklahoma.

Michael Stoll, chair of the University of California Department of Public Policy, economist and professor stated, “With economic stability growing nationally, the current migration patterns reflect longer-term trends of movement to the southern and western states, especially those where housing costs are relatively lower, climates are more temperate and job growth has been at or above the national average, among other factors.”