March 2017 Housing Report: 4 Things to Know

1. Inventory has been dropping since 2008

The active inventory of homes for sale across the country dropped 17.9 percent year-over-year in February. It’s the 100th consecutive month of year-over-year declines, dating back to October 2008.

“Inventory, not the rise in interest rates, remains the principal constraint on home sales,” said Dave Liniger, RE/MAX CEO, Chairman of the Board and Co-Founder. “The resale market is driven dramatically by the availability of new homes. Most U.S. markets have a high demand for new home construction, and although it’s good to see housing starts trending upward, we still need more.”

2. Home prices continue to rise

Low inventory drove prices up six percent year-over-year to a median sales price of $212,000 for the 53 metro areas surveyed. Only six metro areas saw year-over-year decreases or remained unchanged. Sixteen areas saw double-digit increases, with prices rising the most in Fargo, North Dakota (+19.9%), Burlington, Vermont (+18.4%) and Tampa, Florida (+15.9%).

3. Homes aren’t lingering on the market

Houses spent fewer days on the market in February than the same time last year, dropping from an average of 75 days on the market in February 2016 to 68 days during February 2017. Where are things moving most rapidly? San Francisco at 32 days, Omaha, Nebraska at 34 and Denver at 38. Homes are sticking around longest in Augusta, Maine at 147 and Chicago at 109.

4. The market still favors sellers in most areas

Based on the rate of home sales in February, the Months Supply of Inventory dropped slightly to 3.6 months from 3.8 in January. A six-month supply indicates the market is equally balanced between buyers and sellers. In February, 45 of the 53 metro areas surveyed reported a months supply of less than 6.0, typically considered a seller’s market. The other eight areas reported a months supply of more than 6.0, usually considered a buyer’s market. Inventory continues to be scarcest in the west: Denver, Seattle, and San Francisco each had a months supply close to 1.0.

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It’s a Seller’s Market! Should I Downsize Now?

A study by Edelman Berland reveals that 33% of homeowners who are contemplating selling their houses in the near future are planning to scale down. Let’s look at a few reasons why this might make sense for many homeowners, as the majority of the country is currently experiencing a seller’s market.

It's a Seller's Market! Should I Downsize Now? | Keeping Current Matters

In a blog, Dave Ramsey, the financial guru, highlighted the advantages of selling your current house and downsizing into a smaller home that better serves your current needs. Ramsey explains three potential financial advantages to downsizing:

  1. A smaller home means less space, but it also means less time, stress and money spent on upkeep.
  2. Let’s assume you save $500 a month on your mortgage payment. In 30 years, you could have an additional $1–1.6 million in the bank to get you through your golden years.
  3. Use the proceeds from selling your current home to pay cash for a smaller one. Just imagine what you could do with no mortgage holding you down! If you can’t pay cash, aim for a 15-year fixed rate mortgage and put at least 10–20% down on your new home. Apply the $500 you saved from downsizing to your new monthly payment. At 3% interest, you could pay off a $200,000 mortgage in less than 10.5 years, saving almost $16,000 in the process.

Realtor.com also addressed downsizing in an article. They suggest that you ask yourself some questions before deciding if downsizing is right for you and your family. Here are two of their questions followed by their answers (in italics) and some additional information that could help.

Q: What kind of lifestyle do I want after I downsize?

A: “For some folks, it’s a matter of living a simpler life focused on family. Some might want to cross off travel destinations on their bucket lists. Some might want a low-maintenance community with high-end upgrades and social events. Decide what you want to achieve from your move first, and you’ll be able to better narrow down your housing options.”

Comments: Many homeowners are taking the profits from the sales of their current homes and splitting it in order to put down payments on smaller homes in their current locations, as well as on vacation/retirement homes where they plan to live when they retire.

This allows them to lock in the home price and mortgage interest rate at today’s values which makes sense financially as both home prices and interest rates are projected to rise.

Q: Have I built up enough equity in my current home to make a profit?

A: “For most homeowners, the answer is yes. This is if they’ve held on to their properties long enough to have positive equity that will be sizable enough to put a large down payment on their next home.”

Comments: A study by Fannie Mae revealed that only 37% of Americans believe that they have significant equity (> 20%) in their current home. In actuality, CoreLogic’s latest Equity Report revealed that 78.9% have greater than 20% equity. That equity could enable you to build the life you’ve always dreamt about.

Bottom Line

If you are debating downsizing your home and want to evaluate the options you currently have, meet with a real estate professional in your area who can help guide you through the process.

 

Source

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Weekly Marketing Tip

Weekly Marketing Tip

Develop A Guide

  • Nearly every lead you encounter is going to have lots of questions about buying, selling or renting, which means you’re probably answering similar questions over and over.
  • Create your own downloadable or printable guides you can give to leads that includes lots of information about processes and expectations.
  • Make sure it has your name or brand logo on every page so if it is shared online or printed, your name is in front of them as a reminder.

 

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Weekly Marketing Tip

Video Tips

-Know your audience                                                                    -Live-streams (Open Houses, etc.)

-Interviews                                                                                       -Listing videos

-How-to videos                                                                               -Agent promotion

-Local business reviews                                                               -Neighborhood videos

-Testimonials

 

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