Category Archives: real estate market

10 Tips for Homebuyers and Sellers

Spring is here, and so is spring home-buying and -selling. Buyers and sellers preparing to take action this season should put those plans into play now—according to Zillow Group’s Report on Consumer Housing Trends, the No. 1 regret for both buyers and sellers is “not starting their home search or prepping their home to sell soon enough.”

“This spring, both buyers and sellers should be prepared for fast-moving sales, intense negotiations, and even bidding wars,” says Jeremy Wacksman, CMO at Zillow Group. “Home shoppers and sellers are motivated to become more strategic and knowledgeable about what’s happening in their neighborhood. Understanding whether you are in a buyer’s or a seller’s environment will help you manage your expectations and will give you insight into what you’re going to need to bring to the table in order to close the deal.”

For buyers, that means:

Keep your options open. More than half (52 percent) of homebuyers surveyed in the report said they also considered renting, and more than one-third (37 percent) of first-time buyers seriously considered continuing to rent. Savvy shoppers should have a Plan B in place, hoping to buy if it works out, but willing to sign a lease for a home if they don’t make a deal by the time they need to move.

Be realistic with your budget. Once you set it, stick to it. First-time home buyers are more likely to exceed their budget than repeat buyers (39 percent versus 26 percent), according to the report. Before you meet with a lender to determine how much mortgage you’ll be approved for, take a good look at your individual finances and spending preferences to determine the monthly payment range that you feel you can comfortably afford.

Get your financing squared away early. Plan to meet a few lenders four to six months ahead of when you’re planning to buy to ensure you can make a competitive offer quickly when you find your dream home. The majority (82 percent) of buyers get pre-approved, with 77 percent getting pre-approval from a lender before finding a home on which they are interested in placing an offer.

Find an agent with a winning track record. Take the time to find an agent who has expertise in fast negotiation, leveraging escalation clauses, and winning bidding wars. Only 46 percent of buyers got the first home on which they made an offer, according to the report, demonstrating that competition is now part of the process. Choose an agent based on sales and listing activity, area of expertise and reputation.

Communication is key. Make sure your preferred method—and frequency—of communication matches that of your agent. One-third (33 percent) of all buyers surveyed in the report preferred phone calls with their agent over emailing (21 percent) or texting (15 percent). Buyers can use the agent reviews on Zillow to learn more about prospective agents and their clients’ experiences.

And for sellers:

Start early and be strategic. Sellers consider putting their home on the market for five months before they list it—but the top seller regret is that they wished they spent more time prepping for the sale. Many cities have a magic window in the spring when homes have a higher likelihood of selling quickly for more money.

Work with an agent from the start. The vast majority (90 percent) of sellers surveyed in the report who sold quickly and for more than list price worked with an agent, and two out of three (58 percent) began working with an agent at the very beginning of their selling journey.

Pay attention to your online curb appeal. The majority of buyers begin their search online. Sellers who sold their home for more than list price made imagery and home information available online: 48 percent had professional photos taken of the home; 30 percent shot video footage; and 21 percent shot drone footage. Zillow’s video walk-throughs give sellers an easy way to show home features that are hard to capture in photos.

Home improvements can be a worthwhile investment. Sellers who fetched above list price tackled home improvements before listing their home, being 50 percent more likely to take on a large project like modifying an existing home plan and 20 percent more likely to renovate a kitchen than the average seller.

Don’t be afraid to try again. In many markets, nearly half of listing views occur in the first week the home is on the market. Twenty-six percent of those who sold above list price took their home off the market once to adjust the sales price, opting to start anew, rather than letting the home languish on the market with minimal activity.

Reprinted with permission from RISMedia. ©2017. All rights reserved.

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Prepare for a Real Estate Rush This Spring

Everywhere you turn you hear real estate agents talking about the “Spring Market”, the “real estate rush”, the “Spring buyer frenzy”.  While a much larger number of people do tend to move between March and June, the hype really is just that… hype.  The 2017 Spring Real Estate Market, however, appears to be the real deal.  RISMedia tends to agree.

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Homebuyers this spring will meet out-of-this-world prices and unsparing competition—a real estate rush.

According to Clear Capital’s recently released Home Data Index (HDI) Market Report, the national median days on market is 43 days, down from an 85-day stretch seen in January 2012. Days on market in Denver, Colo., Lincoln, Neb., and Raleigh, N.C., are coming in under two weeks, while days on market in Fresno, San Francisco and San Jose, Calif., and Portland, Ore., and Seattle, Wash., are finishing in under three weeks.

“Along with an increase in temperatures, the spring season also brings out the buyers and an increase in demand to the housing market, which most often translates to faster price growth and a decrease in marketing times,” says Alex Villacorta, vice president of Research and Analytics at Clear Capital. “But what’s great news for homeowners—particularly those looking to get out of negative equity or sell outright—is unfortunately bad news for prospective buyers. This springtime uptick in demand is likely to put buyers in a major time pinch in areas where marketing time is already lightning fast.”

Home price growth in the first quarter of 2017 was 0.9 percent, according to the report, with quarterly growth across regions between 0.8 percent and 1 percent. Prices grew 1.8 percent quarterly in San Antonio, Texas, making it the fastest growing metropolitan market, while quarterly prices in San Jose, Calif., remained at a standstill, posting no growth.

“This situation, coupled with the already precarious affordability situation for buyers, can lead to a self-fulfilling prophecy of sorts for the market as a whole, one where buyers rush to purchase homes at or above asking price in fear of waiting too long and losing out—pushing prices up and pulling marketing times even lower,” Villacorta says. “Buyers will need to remain vigilant this spring and constantly keep their eyes peeled for new supply entering the market, and, most importantly, be wary of rushing to purchase at sky-high prices.”

Reprinted with permission from RISMedia. ©2017. All rights reserved.

Peering into the Future of Housing: Predictions for 2017

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WalletHub recently announced its 10 financial predictions for 2017, forecasting several economic to-bes in the coming year. Many have implications for housing, including:

Two Rate Hikes

WalletHub is seeing double in 2017, pegging the Federal Reserve to raise the key rate twice—a quarter point each—to bring the target rate to 1.00-1.25 percent. Interest rates, including for mortgages, will follow suit. (Case in point: credit card interest rates went up 24 basis points in the beginning of 2016, after the Fed raised the key rate 25 basis points in December 2015.)

…but Higher Home Sales

WalletHub forecasts existing-home sales to hit 6 million next year, fueled by—wait for it—rising rates.

“If interest rates rise slowly, we may see a nice bump in home sales and mortgage availability as buyers see low interest rates slowly fading and banks have higher rates to buffer against risk,” Dr. Robert Eyler, director of the Center for Regional Economic Analysis at Sonoma State University, told WalletHub.

WalletHub’s estimate is more optimistic than the 5.52 million offered by the National Association of REALTORS® (NAR).

More Time for the CFPB

WalletHub senses the Consumer Financial Protection Bureau (CFPB), which was ruled unconstitutional by a federal appeals court this fall, won’t get the boot, even with the “You’re fired” administration taking office.

“[The CFPB’s] good work will be undercut by some politicians, even further than it already has been,” Jeffrey Frankel, professor at the Belfer Center for Science and International Affairs at Harvard University, told WalletHub. “I hope and guess that it will not be abolished outright.”

…and for Credit Scores to Improve

WalletHub has a sunny outlook for credit scores, anticipating the average score to rise to 675 from 668 next year. The reason? Millions of homeowners will see foreclosures and short sales—black marks from the crash—drop off their credit reports, helping their case for a new mortgage.

Source: WalletHub
Reprinted with permission from RISMedia. ©2017. All rights reserved.

National Association of REALTORS 2nd Quarter HOME Survey Results

Yesterday, the National Association of REALTORS® (NAR) released the  July Housing Opportunities and Market Experience (HOME) Survey Results.july HOME

According to NAR, the HOME report was created to monitor consumer sentiment about the housing market. It covers core topics that will be tracked on a monthly basis such as views on housing as a good financial investment, whether homeownership is part of the American Dream, if now is a good time to buy or sell a home and perception of home price changes.

Highlights include:

  • In the second quarter of 2016, 74 percent of people believe that now is a good time to buy a home.
  • Only 26 percent of people believe that now is not a good time to buy a home.
  • Sixty-one percent of people believe that now is a good time to sell a home, up from 56 percent in Q1 2016. Thirty-two percent believe that strongly, up from 28 percent in Q1 2016.
  • Forty-seven percent of those 34 years or younger have student loan debt.

Click here to download the full report.

Complex Consumers: Why Your Old Marketing Won’t Work In Today’s Luxury Market

In decades past, luxury consumers were a primarily homogenous group with ostentatious style and a taste for status-setting items with luxury labels. Today, however, these values are all but obsolete. Luxury consumers are more varied, diverse, numerous, and complex than ever before, and thus less receptive to old marketing and branding tactics such as regionally- and demographically-targeted messaging. Market research shows that the “new” luxury consumer—in all of her instantiations—demands a fresh approach from luxury brands and service providers.

Out With The “Old” Luxury Consumer & In With The New

Although the new luxury consumer does not fit into one box, there are a few sentiments and traits that are growing across the board.

  • Global. The luxury consumer exists everywhere, and the Internet makes most products and services available to people from all corners of the world.
  • Sophisticated. Compared to past generations, today’s luxury consumer has more refined tastes and thinks more about the impact of their consumerism. These sophisticated shoppers are more educated about their options when making a buying decision.
  • Demanding. They expect their high-end vendors and service providers to be ever-accessible, as well as near-superhuman in their ability to predict the consumer’s needs and concerns.
  • Concerned with sustainability. The luxury market is not immune to eco-conscious consumers and business practices.
  • Shopping across all channels. Although today’s luxury consumer tends to communicate online, don’t assume that they’re doing all of their buying on the Internet. The in-person, in-office experience still matters.
  • Diverse. In age, race, socioeconomic background, taste, and expectations.

Luxury Experiences

 

One of the most important changes in the luxury consumer is the shift in interest from luxury “things” to luxury experiences. “Shock of the New Chic,” a recent research article by BCG Perspectives, reports that “newly affluent buyers tend to amass tangible goods that show off their wealth. Those who have acquired the ‘things’ they want tend to move on to one-of-a-kind experiences that they can share with others.”

 

Across all levels of affluence, the interest in luxury experiences is growing, from free-diving with hammerhead sharks to attending art auctions with other community members. American Millennials, for example, generally place much more stock in shared experiences than the elder and wealthier Baby Boomers. BCG’s 2013 Global Consumer Sentiment Survey showed that 29% of Chinese consumers prefer enriching experiences to products, while 51% of American consumers said the same. Today, experiential luxury constitutes 55% of luxury spending worldwide, and sales of luxury experiences now outstrip sales of high-end products.

How to Adapt & Improve

 

Here are 3 ways that luxury service providers can change their “business as usual” to embrace the changing trends and demographics within their market.

 

  • Offer luxury experiences. Real estate professionals should expand their services and offer luxury experiences to clients and prospects. This might mean organizing exclusive events, hosting community meet-ups for high-net-worth individuals, or throwing soirées featuring local luxury brands and products. Think of creative, on-brand ways to enhance your clients’ experience and enable them to “live” luxury, rather than just live in it.
  • Enrich your sales process. Research shows that, to excel with today’s consumer, all aspects and stages of your service should be top-tier. “Turning sales activities into deluxe experiences in their own right is nothing new,” according to BCG’s research. “But the practice is reaching new levels of excellence across a widening range of luxury segments . . . and across all channels.” Ask yourself how you can enhance your sales experience in the office, online, and everywhere in between. One digital option in real estate is to provide an easy method for clients to track the selling or buying process via a sleek smartphone app with push notifications. With a customer service interface that is branded and personalized, clients feel cared for and informed.
  • Test out new “experiential” business models. Over the past decade, the luxury market has seen a proliferation of businesses based on “sampling” luxury items or experiences, sometimes through rental or subscription models like those of Bag Borrow Or Steal and Birchbox. BCG noted that, “Although some see such businesses as democratizing luxury—perhaps even diluting the participating brands—the new model clearly resonates with consumers, especially Millennials.” In other words, it’s time to second guess the old assumption that exclusivity begets luxury.

 

Market research and statistics shed light on the luxury consumer’s ongoing transformation, and there is mounting evidence that it’s time for big changes in the luxury industry. BCG Perspectives stressed that, although luxury brands historically put less stock into research than their mainstream counterparts, “the formulas for success have become much more complicated.”

A special article from the Institute for Luxury Home Marketing

Teens and the American Dream

Many within today’s generation of teens, 21 million strong, say they’ll be willing to give up modern luxuries for a more mainstream view of the American dream of homeownership, according to a new study from Better Homes and Gardens Real Estate, which reveals the home ownership wish lists of children ages 13 to 17, part of Generation Z. Eighty-nine percent of Gen Z teens surveyed say owning a home is part of what they believe the American dream is, followed by graduating from college (78%); getting married (71%); and having children (68%).

They’re optimistic that they’ll become home owners one day, too. Ninety-seven percent say they’ll own a home one day, and they say they’d even be willing to make some unusual sacrifices in order to put them on the path to home ownership.

For example, 53 percent say they’d be willing to give up social media for a year or would be willing to do twice as much homework every night in order to become a home owner one day. Forty-two percent would go to school seven days a week, and 39 percent would even be willing to take their mom or dad to their prom if it meant they could be a home owner one day, the survey showed.

Sherry Chris, president and CEO of Better Homes and Gardens Real Estate remarked, “Today’s teens are fiscally literate and realistic when it comes to their future. It’s quite profound that a generation that has never known a world without social media is willing to give up such a staple in their modern lives to achieve their dream home.”

For more information on the real estate forecast, contact us at 703-836-1464.

Source: Better Homes and Gardens Real Estate