Everyone knows you shouldn’t judge a book by its cover. But while that’s definitely true for books, it isn’t necessarily the case for homes. The outside of a house can tell a prospective home buyer a lot about how well a house has been maintained. That’s why, the Appraisal Institute recommends homeowners improve their home’s exterior and landscaping, if they want to increase its value. “A home with lackluster landscaping or an exterior in desperate need of a fresh coat of paint will likely be unappealing to prospective buyers and ultimately could affect the home’s potential resale value,” Jefferson L. Sherman, president of the Appraisal Institute, says. The institute recommends removing weak, old, or damaged trees, keeping landscape design in line with comparable properties in the area, and taking care of your lawn. And, since the National Association of Realtors says standard lawn care services recover 267 percent of their cost at resale, there’s no excuse not to. Other landscape maintenance projects that recoup all, or most, of their cost include tree care and irrigation system installation. (source)
Archive for May 2020
Millennials Say They Don’t Feel Secure At Home
When considering where to live, there are some factors that are based on your specific preferences and others that are universal. For example, we may not all agree on the style of house we’d like but we all value our privacy. Security is another thing we can all agree on. Nobody wants to live somewhere where they don’t feel safe. That’s why, a new survey from Allegion is an eye opener. The survey, which asked millennials about their living situation, expectations for the future, and their sense of security found that the vast majority of them say they don’t feel safe at home. In fact, 74 percent of respondents said they don’t feel secure. That’s a surprisingly high number. However, some of that is due to the fact that millennials are younger and more likely to live in apartment buildings, where they have less control over their security. But other issues like package thieves – which nearly 40 percent of Millennials say they’ve been a victim of – aren’t specific to multifamily living. Fortunately, technological advances such as smart security systems and video doorbells continue to offer us new ways of securing our homes and keeping our families safe. (source)
One In Four Properties Considered Equity Rich
Approximately one in four of the 54.7 million mortgaged homes in the United States was considered equity rich in the first quarter of 2020, according to new numbers from ATTOM Data Solutions. Equity rich refers to when the amount owed on a property is 50 percent or less of the property’s value. Conversely, just one in 15 homes was considered seriously underwater. Todd Teta, chief product officer with ATTOM, said while homeowners were in a strong position at the beginning of the year, the coronavirus could potentially affect their standing as time goes on. “In the latest marker of the ongoing housing market boom, mortgage payers were four times as likely to have homes worth considerably more than what they owed on their loans than considerably less,” Teta said. “But as with other rosy first-quarter reports, this one needs to be taken in the context of the looming impact of the coronavirus pandemic. With the potential for home values to fall, there is a significant chance that equity levels could drop over the coming months while underwater levels rise.” Still, the combination of low for-sale inventory and pent-up buyer demand suggests home prices will remain firm and any declines will be moderate. (source)
Americans See Little Change Ahead For Affordability
Fannie Mae’s most-recent Home Purchase Sentiment Index found Americans aren’t expecting big changes ahead for home prices and mortgage rates. The survey – which measures perceptions of the housing market and Americans’ financial health – revealed that housing sentiment has fallen but, despite rising pessimism, consumers don’t foresee significant changes to affordability factors in the coming year. In fact, survey results show 36 percent of respondents think home prices will stay the same over the next year, compared to 23 percent who say they expect an increase and 34 percent who expect prices to fall. Among those expecting a drop, the average predicted price decline was 2 percent. Similarly, 35 percent of participants said mortgage rates will stay the same, while 33 percent expect a decline and 23 percent see rates rising. Doug Duncan, Fannie Mae’s senior vice president and chief economist, said rates remain a source of optimism. “While consumers did grow more pessimistic in April about whether it’s a good time to buy a home, low mortgage rates remain a driver of purchase optimism,” Duncan said. “We expect that the much steeper decline in selling sentiment relative to buying sentiment will soften downward pressure on home prices.” (source)
Purchase Loan Demand Grows For 3rd Straight Week
According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for loans to buy homes rose for the third consecutive week last week, climbing 6 percent from one week earlier. It’s yet another sign that – though the coronavirus has slowed home sales – there is still significant pent-up home-buyer demand. Mike Fratantoni, MBA’s senior vice president and chief economist, says activity is picking up as states loosen their stay-at-home orders. “Purchase volume increased for the third week in a row, led by strong growth in Arizona, Texas, and California,” Fratantoni said. “Although purchase activity remains almost 19 percent below year-ago levels, this annualized deficit has decreased as more states reopen amidst the apparent, pent-up demand for home buying.” Also in the report, average mortgage were down week-over-week and are now at new survey lows. Rates fell for 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate loans. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)
When Should You Sell To Get The Best Price?
Everybody knows location is important in real estate. But, if you’ve got a home to sell, when you do it makes a difference too. And while experts will tell you that trying to time the market is a mistake, there are certain times of year that are undeniably better for home sellers than others. For example, ATTOM Data Solutions has released a new analysis that pinpoints the time of year when sellers get the highest premium for their homes. The results show home sellers that list their homes in May, June, or July see a seller premium between 7 and 10 percent. Todd Teta, ATTOM’s chief product officer, says late spring and early summer are always peak months – though this year may be different. “Timing the housing market is far from an exact science,” Teta said. “But home sellers who want to get the highest price should aim to complete their deals during the peak house-hunting season in late spring or early summer, when the most potential buyers are out looking. This year could be a striking exception if many potential home buyers stay home because of coronavirus social distancing or worries about job security.” The analysis found that 20 of the best days of the year for home sellers were in May and June, with June 21, 22, and 29 in a three-way tie for highest seller premium at 10.5 percent. (source)
Number Of Signed Contracts Falls In March
The impact of coronavirus mitigation efforts becomes more clear as March home sales numbers are released. Both new and existing home sales declined after stay-at-home orders were put into place mid month. Now, the National Association of Realtors’ Pending Home Sales Index shows that the number of contracts to buy homes also suffered significant declines. In fact, pending sales – which refer to contract signings, not closings – were down 20.8 percent month-over-month in March. Lawrence Yun, NAR’s chief economist, says falling sales are a temporary problem. “The housing market is temporarily grappling with the coronavirus-induced shutdown, which pulled down new listings and new contracts,” Yun said. “As consumers become more accustomed to social-distancing protocols, and with the economy slowly and safely reopening, listings and buying activity will resume, especially given the record low mortgage rates.” He may be right. Surveys taken over the past few weeks have shown increasing interest among Americans hoping to buy and sell homes. They’ve also shown prospective buyers and sellers have a willingness to adapt to necessary changes to the typical buying process. (source)
Buyers And Sellers Eager To Resume Their Plans
Predicting the housing market’s future is always an inexact science. Trying to factor in the effects of a global health crisis makes it even more difficult. But one way to get a feel for where things might be headed is to ask potential home buyers and sellers about their plans, concerns, and perceptions. After all, what happens next is largely determined by what they do. That’s why recent surveys showing Americans are still interested in pursuing their plans offer hope for a quick turnaround once stay-at-home orders are lifted. For example, one new survey found that a majority of respondents indicated that they planned to get back into the market within six months, with even more saying they’d be ready to buy or sell a home within a year. Naturally, though, their plans come with some concerns. Among them, job security ranks high, along with possible exposure to the coronavirus. However, market factors seem to be less of a worry, with fewer participants expressing concern about a lack of homes for sale or falling prices. Overall, survey respondents seem eager to resume their plans and willing to adapt to new technology and safety measures. (source)
First Quarter Results Show Big Return For Sellers
Homeowners who sold their homes during the first quarter of 2020 saw a 33.7 percent return on investment compared to the original purchase price, according to new numbers from ATTOM Data Solutions. The typical home sale resulted in a $67,100 price gain – which is an increase over the fourth quarter of 2019 and up from $59,000 one year earlier. The numbers are evidence that the housing market was strengthening at the start of the year. Todd Teta, ATTOM’s chief product officer, says, though its clear the market had some momentum, the impact of the coronavirus will likely cause it to stall. “The national housing market continued at full throttle in the first quarter of 2020, setting new price and profit records as it entered its ninth straight year of gains,” Teta said. “It is extremely important to note that the latest momentum is likely to hit a wall and reverse because of the drastic economic slowdown caused by the coronavirus pandemic.” Still, the fact that the housing market was gaining strength at the beginning of the year should help cushion the impact and help it fare better than other segments of the economy. (source)
