Real Estate 'Topics, Tips, Trends and News'

Thursday, November 12, 2015

REAL ESTATE NEWS...Gap Between Homeowner and Appraiser Valuation Narrows

• Appraisals were just 1.98% lower than the values the homeowners were expecting.
• October marks the second month the gap between values narrowed, and ninth consecutive month where homeowner’s estimates of value exceeded the appraised value of the home.
• Nationally, home values increased 1.07% in October, 4.01% since 2014.

DETROIT, November 10, 2015 – Quicken Loans, the nation’s second largest retail mortgage lender, today reported average home appraisals in October were 1.98 percent lower than what homeowners expected marking the second consecutive month the spread has tightened. The perception gap was slightly larger in September, with appraised values 2 percent higher than what homeowners estimated.

Home values rose at an increased pace in October according to Quicken Loans’ national Home Value Index (HVI). Average appraised values rose 1.07 percent in October, compared to near flat growth in September. The Northeast led the country in home value gains with a 1.94 percent increase, while growth in the West was slowest, with a 0.49 gain.

Home Price Perception Index (HPPI)

The difference between what homeowners perceived their homes to be worth and what appraisers valued them narrowed in October, albeit slightly. Average appraised values in October were 1.98 percent lower than what homeowners estimated according to the national HPPI. This is the second month the gap between appraiser opinions and homeowner expectations narrowed, although October marks the ninth consecutive month owners overestimated their home’s value.

“It’s too early to call it a trend, but it is encouraging to see the gap between the estimates homeowners provide and the appraised values starting to narrow,” said Quicken Loans Chief Economist Bob Walters. “The more homeowners are in line with appraisers, the easier it will be to refinance their mortgage and easier for those looking to buy a home. If the two are aligned, it eliminates one of the top stumbling blocks in the mortgage process.”

Home Value Index (HVI)

Home values climbed 1.07 percent in October according to Quicken Loans’ national HVI, the only measure of home values based completely on appraisals. The increase comes after two months of practically flat home value changes. Values continue to raise annually as well, with a 4.01 percent gain compared to October 2014. All four regions measured saw increases. The Northeast had the highest home appreciation, with a 1.94 percent increase. The Midwest, South and West regions all had value growth of less than 1 percent.

“Home values continue to make steady, healthy, growth,” said Walters. “Equity gains increase homeowner faith and enthusiasm in the housing market. There are still many Americans underwater, but with every bump in equity more homeowners who have been waiting to list their home are able to sell or more easily refinance – which takes pressure off of those homeowners and provides housing inventory for first time homebuyers.”

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Tuesday, November 10, 2015

REAL ESTATE TOPICS...REALTORS® Confidence Index

The REALTORS^® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions. In addition, the "Questions of the Month," feature results of a timely aspect of the housing market.

Highlights

Market activity broadly improved in September 2015 compared to a year ago.
On one hand, sustained job growth and low interest rates, with the 30-year fixed mortgage rate back to less than four percent in September, appeared to be boosting demand.
On the other hand, the lack of inventory and high home prices were reported to be moderating demand, although some REALTORS® reported declining prices in their areas.
The confidence indices for current conditions and the six-month outlook for single-family, town home, and condominium properties all increased compared to a year ago but decreased compared to last month, partly due to the seasonal drop in demand.
The buyer traffic index also increased compared to a year ago, while the seller traffic index stayed below 50, an indication of tight supply across many local markets.
Approximately 92 percent of respondents reported taking measures to be ready for the implementation of the new disclosure regulations (that took effect on October 3, 2015) such as attending seminars, coordinating with lenders, advising clients, and revising model contracts in line with the new TILA-RESPA guidelines.

REAL ESTATE TIPS...What to Do If Your Home Isn't Selling

In a strong market, if a home is priced right and shows well, it should sell within the first six weeks. If it doesn’t, many sellers become frustrated, especially if their agent begins pushing for a price reduction.

It’s a common rub: the seller thinks the agent just wants a quick sale, but the agent sincerely wants to help the seller get action. Agents understand that a listing loses momentum and excitement soon after being listed. Buyers will think of a home as stale, tired, or flawed if it sits on the market too long. Here are some ways to get more traction if your home is not generating offers.

Location, price and condition are key

You can’t change your home’s location, but you do have some control over the other two important buyer considerations. If the home is still sitting on the market after a few months, and especially if it has had no showings or offers, you need to look at the price and the condition.

You have two big choices to make if you are ready to sell. The first is to take the home off the market and make some changes, such as staging, de-cluttering, and altering the look of the kitchens and bathrooms.

If you are getting specific feedback about one part of the home, change it. A few months off the market will ensure that, when it comes back on, there will be a new set of buyers taking a look at your fresh listing.

If you are unwilling to make the needed changes to the home, the other option is to reduce the price. I recently visited with sellers who built a brand new beautiful home with excellent finishes and fixtures. But after four months, they only had two showings, and in a market where homes were selling with multiple offers within weeks.

The issue was the location. It was the absolute best home on a very tough block, and the setting was not private. In this case, the sellers had no choice. There was no moving or improving the house. The only option was to drop the price.

The sellers opted to take the home off the market and rent it because they were not ready to sell at the recommended price.

Make sure you and your agent are on the same page

If you and your agent don’t see eye-to-eye on the pricing or sales strategy prior to listing, it might be time to find another agent.

You want an agent who has your back and who is on the same page as you. Without that synergy, you could be in for unnecessary conflict six weeks in.

Discuss your intentions with your agent upfront, and listen to her feedback. A price reduction or low offer shouldn’t come as a surprise. But if the home isn’t selling, and the seller wants to see action, a good listing agent will ask for offers, follow up with interested parties, and let them know that the seller wants to sell. Reducing the listed price may not be necessary if there’s a buyer who understands that the seller will entertain an offer below the asking price.

You may have to see firsthand how the market works. If you list your home at a lower price than you’re comfortable with, you may be sorry if you get offers right away. But if you price it higher and don’t get any response after some time, then you will see the market speak for itself. I’d much rather have seller clients in the latter situation than the former.

Every scenario is different, and it’s so important to work with an agent who is in synch with your strategy and can help you adapt to your market.

Saturday, November 7, 2015

REAL ESTATE NEWS...California September home sales and price report

California home sales ease in September as market transitions into off-season

- Existing, single-family home sales totaled 425,030 in September on a seasonally adjusted annualized rate, down 1.5 percent from August but up 6.9 percent from September 2014.

- Statewide sales were above the 400,000 mark for the sixth straight month.

- September’s statewide median home price was $482,150, down 2.3 percent from August but up 4.3 percent from September 2014.

LOS ANGELES (Oct. 16) – California existing home sales and median price retreated in September but still posted higher than a year ago, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

Home sales remained above the 400,000 mark in September for the sixth consecutive month and posted higher on a year-to-year basis for the eighth straight month. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 425,030 units in September, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2015 if sales maintained the September pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The September figure was down 1.5 percent from the revised 431,630 level in August but up 6.9 percent compared with home sales in September 2014 of a revised 397,490. The year-to-year change was lower than the 6-month average increase of 9.7 percent observed between March 2015 and August 2015.

“While home sales continue to improve from last year, it will be interesting to see what impact the new implementation of the Consumer Financial Protection Bureau's Know Before You Owe TILA-RESPA Integrated Disclosure, or TRID, will have on home sales in the future,” said C.A.R. President Chris Kutzkey. “Some sales that would have closed in October may be delayed because of longer loan processing times. In the first week of its implementation, mortgage applications have already seen a significant drop, partially due to the volume that was pulled forward prior to TRID’s effective date.”

The median price of an existing, single-family detached California home decreased 2.3 percent in September to $482,150 from a revised $493,510 in August. September’s median price was 4.3 percent higher than the revised $462,380 recorded in September 2014. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.

“The statewide median home price has been on the rise but may have already peaked for the year,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Home prices are moderating due partly to a shift in the mix of sales, as more homes are being sold in lower priced regions, such as the Central Valley, where the sales share increased from 25.5 percent last year to 26.4 percent in September. Conversely, the Bay Area experienced a drop in sales share from 18.8 percent to 17.2 percent during the same time period. This trend will likely persist through the rest of 2015.”

Other key points from C.A.R.’s September 2015 resale housing report include:

• While sales continued to improve from last year at the state level, the number of active listings continued to drop from the previous year. Active listings for California dropped 1.9 percent from August and decreased 7.2 percent from September 2014.

• The September Unsold Inventory Index remained at 3.7 months, unchanged from August but was down from 4.2 months in September 2014. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A six- to seven-month supply is considered typical in a normal market.

• The median number of days it took to sell a single-family home edged up in September to 32.6 days compared with 29.9 days in August but was down from a revised 36.3 days in September 2014.

• According to C.A.R.’s newest housing market indicator which measures the sales-to-list price ratio*, properties are again generally selling below the list price, except in the San Francisco Bay Area, where a lack of homes for sale is pushing sales prices higher than original asking prices. The statewide measure suggests that homes sold at a median of 98.5 percent of the list price in September, up slightly from 98 percent at the same time last year. The Bay Area is the only region where homes are selling above original list prices due to constrained supply with a ratio of 102.4 percent in September, up from 101.2 percent a year ago.

• The average price per square foot** for an existing single-family home was $236 in September 2015, unchanged from August but up from a revised $231 in September 2014. Price per square foot at the state level has been on an upward trend since early 2012 but appears to be leveling off and slowing to an average increase of 1.3 percent in the past three months as home price appreciation began to moderate.

• San Francisco had the highest price per square foot in September with $770/sq. ft., followed by San Mateo ($723/sq. ft), and Santa Clara ($577/sq. ft.). The three counties with the lowest price per square foot in September were Madera ($118/sq. ft.), Kings ($118/sq. ft.), and Tulare ($120/sq. ft.).

• Mortgage rates dipped in September, with the 30-year, fixed-mortgage interest rate averaging 3.89 percent, down from 3.91 percent in August and 4.16 percent in September 2014, according to Freddie Mac. Adjustable-mortgage interest rates also slipped, averaging 2.59 percent, down from 2.60 percent in August and 2.43 percent in September 2014.

Friday, November 6, 2015

REAL ESTATE TOPICS...Market Pulse

REAL ESTATE NEWS...California Market @ A Glance

Market @ A Glance

C.A.R. closely monitors and analyzes trends in the residential real estate industry. The table below contains the latest reported existing home sales series, median home prices, unsold inventory index, median time on market, first-time buyer housing affordability index, and the latest mortgage rates.

Market @ A Glance
California	Reporting Period	Current Period	Last Period	Year Ago	Change from Last Period	Change from Year Ago
Existing Home Sales (SAAR) *	September-15	425,030	431,630	397,490	-1.5%	6.9%
Median Home Price *	September-15	$482,150	$493,510	$462,380	-2.3%	4.3%
Unsold Inventory Index (months) *	September-15	3.7	3.7	4.2	0.0%	-11.9%
Median Time on Market (days) *	September-15	32.6	29.9	36.3	9.0%	-10.2%
Traditional Housing Affordability Index (HAI) *	2015-Q2	30%	34%	30%	-4.0%	0.0%
30-year fixed-rate mortgage (FRM) **	September-15	3.89%	3.91%	4.16%	-0.02%	-0.27%
SOURCES * CALIFORNIA ASSOCIATION OF REALTORS®, ** Federal Home Loan Mortgage Corp.

Thursday, November 5, 2015

REAL ESTATE TIPS...Appealing to Autumn Home Buyers

Get to know the two types of shoppers in the market for a new home this season.

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For years, seasons and school calendars have dictated real estate markets. Many buyers search hard in the spring and early summer so they can find a house and close before the school year starts in September.

As a result, many sellers have held off listing their homes near the holidays and in the winter, favoring the warm spring months to showcase their landscaping and outdoor spaces.

These cycles worked well for decades because families were the most common buyers. But many of today’s buyers are young millennials or empty nesters. School schedules and seasons don’t typically dictate their home purchase time frame. These buyers are active in the fall and even into the winter months, including the holidays.

If you have a home to sell, fall is a great time to list it, despite conventional wisdom. With less competition than in the spring, it may even turn out to be better financially. Here’s how to appeal to the two types of home shoppers that are particularly active in the fall.

Marketing to millennials

For millennials, the market is always on. As long as their smartphone or tablet is within reach, they are active buyers.

Fully connected and attached, millennials will look at listings and analyze data 24/7. Sellers must keep their home in tip-top shape and showing-ready at all times.

Don’t expect millennial buyers to wait around for an open house. Many prefer to see homes they like on their timeframe. Be ready to accommodate them.

Have great listing photos online the minute the home hits the market. Nothing is more frustrating to young buyers than to be notified via text or email about a property in an awesome location, only to find that the listing doesn’t include any photos.

Millennials are visual. Spend extra time on the photo shoot, and make sure your agent hires a professional photographer. Good photos get your buyers in the door. Give them what they want.

Attracting empty nesters

Empty nesters tend to be more old school than millennials. They can be slower and more methodical about a purchase. Don’t rush them.

Many older buyers are looking to downsize, which means they either need to sell their existing home before they buy, or they will need to take a loan against their current home to purchase. Juggling finances means they come to the table with an incredible amount of stress. Give them time to process decisions.

Empty nesters may not be as responsive as other buyers, and may not communicate quickly via text, or even check email during off hours. If possible, accommodate their response times. If they feel rushed or under the gun, no matter how hot your home or how competitive the market, they will walk away.

Don’t forget, someone with five or six decades of life experience comes to the table more informed. Having been through a couple of financial and housing crises, they may be more cautious as they approach retirement and life on a fixed income.

The best salesperson knows and understands his or her buyers. The same holds true for real estate sales. As a seller, prepare to meet a buyer that may be very different from you. Plan in advance to give them what they want. Once you have a buyer on board, learn as much as you can about who they are, and work with them. What works for some buyers may not work for others.

REAL ESTATE TIPS...10 Steps to Take Before You Paint

by Courtney Soinski

The single most important stage in tackling a home improvement project is through preparation. After all, can a masterpiece be created without a prepped, clean canvas? I think not.

First, you should understand how to properly prepare a room to be painted, because you and I both know that the last thing you want is to end up feeling frustrated and overwhelmed before you even begin.

To help save your time, money, and sanity, follow these painting preparation steps for your next home project!

1. Clear the room.

Do your best to clear the room of all furniture, décor, as well as any light switch covers and outlet covers. This will make it much easier to move around the room, without the chance of ruining any of your belongings with paint splatters.

2. Use plastic to protect large items.

If there’s anything that is too large to be removed, move them to the middle of the room. Then, cover them in plastic to provide protection from paint.

3. Clean and dust.

Give the room a deep cleaning. This includes vacuuming and mopping the floors, and getting rid of dust and cobwebs. Then, use a damp cloth to wipe down any woodwork or molding on the walls.

As a general rule, walls should be dry and dull before applying any paint or primer.

4. Line the room’s edges with paper.

Complete this step with either leftover newspaper, or a simple purchase of a disposable paper roll from any home improvement store. You also use large pieces of plastic, typically found at a dollar store.

5. Spackle and sand.

If there is loose or peeling paint, be sure to scrape and sand that area. Use Spackle or any patching material to fill in any cracks, holes, or dents. After applying the Spackle, allow it to dry according the instructions on the package (normally about 2-4 hours). Lastly, use sandpaper to create a smooth surface. If necessary, you may apply a second coat and repeat the process.

6. Wash the walls.

Thoroughly wash the room’s walls with a mild soap and water solution. Then, rinse with clean water and allow them to dry completely.

7. It’s primer time.

A primer must be used in order to protect bare, unfinished drywall. Applying a primer is also beneficial for walls that were previously painted with a darker color, stained, or are generally in need of repair.

8. Apply painter’s tape.

This step is essential in keeping paint off the windows and trim. Using the tips of your fingers, press the tape firmly onto the wall’s surface while ensuring there aren’t any air bubbles or folds that paint could get into.

9. Always paint from the top down.

Paint the ceiling first. After that, go ahead and start on painting the walls, but be sure to start in a corner. Throughout the project, you should always try to keep a wet edge. Next, you’ll want to paint the trim, followed by the cabinets, and finish it off by painting the doors.

10. Remove the painter’s tape.

Once your project is finished and completely dry, slowly pull the tape off in a continuous and steady motion, all the while keeping a 90-degree angle to the painted surface. Sticking to that angle will give your walls the cleanest possible paint line.

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