The National Association of Realtors just released the results of their latest Pending Home Sales Index, which showed a small 1.4 percent decline in signed contracts in August. Pending sales remain strong year-over-year as they were 6.1 percent higher than August ’14 and have now risen for 12 consecutive months.
What is the Pending Home Sales Index (PHSI)?
NAR’s PHSI is “a forward-looking indicator based on contract signings”. The higher the Pending Home Sales Index number, the more contracts have been signed by buyers that will soon translate to sales.
In every major region of the country, pending sales are up year-over-year as shown by the graph below:
What does this mean for the market?
Lawrence Yun, chief economist for NAR explained:
“Pending sales have leveled off since mid–summer, with buyers being bounded by rising prices and few available and affordable properties within their budget.”
There is no need to worry
Yun went on to say, “Even with existing–housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.”
So what does this mean to buyers?
There is a lot of competition out there right now for your dream home. Prices are going to continue to climb, act now before you are priced out of your future home.
What does this mean to sellers?
If you are on the fence about listing your home for sale and debating whether now is the time to move on with your plans of relocating… don’t wait!
There are more buyers that are ready, willing and able to buy their first, second, third, vacation or investment property now than there has been in years. The supply of homes for sale is not keeping up with the demand of these buyers.
Listing your home for sale now will give you the most exposure to buyers and the best sales price.
Bottom Line
Whether you are planning on buying or selling a house this year, waiting to act no longer makes sense.
For more information, please contact The Olear Team today!
CoreLogic recently released their 2015 2nd Quarter Equity Report which revealed that 759,000 properties had regained equity in the last quarter. That means that 91 percent of all mortgaged properties (approximately 45.9 million) are now in a positive equity position. Anand Nallathambi, president and CEO of CoreLogic, reported:
“For much of the country, the negative equity epidemic is lifting. The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets.”
Obviously, this is great news for the financial situation of many homeowners.
But, do they realize their equity position has changed?
A recent study by Fannie Mae suggests that many homeowners are unaware that their equity position has changed … in some cases dramatically. For example, their study showed that 23 percent of Americans still believe their home is in a negative equity position when, in actuality, only 9 percent of homes are in that position.
The study also revealed that, though 69 percent of homes had “significant equity” (greater than 20 percent), only 37 percent of Americans realize it.
This means that 32 percent of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing).
Fannie Mae spoke out on this issue in their report:
“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”
Bottom Line
Every homeowner should be aware of the true equity in their house and also realize the opportunities that go along with it. If you are unsure of the savings you currently have built up in your home, contact a real estate professional to help ascertain that number. You may be surprised.
For more information, please contact The Olear Team today!
The National Association of Realtors’ most recent Existing Home Sales Report revealed that home sales were up rather dramatically over last year in five of the six price ranges they measure.
Only those homes priced under $100,000 showed a decline (-7.7 percent). The decline in this price range points to the lower inventory of distressed properties available for sale and speaks to the strength of the market.
Every other category showed a minimum increase of at least 5.6 percent, with sales in the $250,000- $500,000 range up 16.9 percent.
Here is the breakdown:
What does that mean to you if you are selling?
Houses are definitely selling. If your house has been on the market for any length of time and has not yet sold, perhaps it is time to sit with your agent and see if it is priced appropriately to compete in today’s market.
For more information, please contact The Olear Team today!
If you are debating listing your house for sale this year or even early next year, here is the No. 1 reason not to wait.
Buyer Demand Continues to Outpace the Supply of Homes For Sale
According to the National Association of REALTORS’ (NAR) Foot Traffic report, there are more buyers out in the market right now than at any other time in the past three years.
The graph below shows the significant increase in foot traffic experienced this year compared to 2014.
The latest Existing Home Sales report shows that there is currently a 5.2-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and well below August 2014 numbers.
The chart below details the year-over-year inventory shortages experienced so far in 2015:
Bottom Line
Meet with a local real estate professional who can show you the supply conditions in your neighborhood and assist you in gaining access to the buyers who are ready, willing and able to buy today!
For more information, please contact The Olear Team today!
A recent study by Edelman Berland revealed that of homeowners who are contemplating selling their house in the near future 33 percent plan to scale down. Let’s look at a few reasons why that would make sense to many Americans.
In a recent blog post, Dave Ramsey, the financial guru, discussed the advantages of selling your current house and downsizing into a smaller home that better serves your current needs, something we refer to as right-sizing. Ramsey explains three potential financial advantages to downsizing:
A smaller home means less space, but it also means less time, stress and money spent on upkeep
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.
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 percent down on your new home. Apply the $500 you saved from downsizing to your new monthly payment. At 3 percent 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 a recent article. They suggest 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 profit from the sale of their current home and splitting it to put down payments on a smaller home in their current location and a vacation/retirement home 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. This 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 recent study by Fannie Mae revealed that only 37 percent of Americans believe they have significant equity (> 20 percent) in their current home. In actually, 69 percent have greater than 20 percent equity. That equity could enable you to build a life you have 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. For more information, please contact The Olear Team today!
