The latest edition of CoreLogic’s Home Price Index shows that nationally, home prices have appreciated 6.7% over the last year and 0.9% month-over-month. The release of the report included this headline,
“National Home Prices Now 50% Above March 2011 Bottom”
The real estate market has come a long way since 2011, which is great news for homeowners!
Nearly 79% of homeowners with a mortgage in the US now have significant equity in their homes (defined as over 20%), according to the latest Equity Report. The challenge is that not every homeowner knows how much their home’s value has appreciated.
Homeowners in Denver, CO lead the way with 8.7% appreciation over the last year, while owners in Washington and Utah have experienced a 3% increase in values since the start of this year!
Nationally, CoreLogic forecasts that home values will increase another 5.0% by this time next year.
Bill Banfield, VP of Capital Markets at Quicken Loans, recently explained the importance of knowing the conditions in your area,
“With home values constantly changing, and the rates of change varying across the country, this is one more way to show how important it is for homeowners to stay aware of their local housing market.”
Do you know what your house is worth? Have you stayed put because you are nervous you won’t have enough equity to buy your dream home? Let’s get together to perform an equity analysis and give you the freedom to achieve your dreams.
There are some homeowners who are patiently waiting to get the price they hoped for when they originally listed their houses for sale. Something these homeowners might want to take into consideration is the fact that if their homes haven’t sold yet, maybe they’re not priced properly.
After all, 14,904 houses sold yesterday, 14,904 will sell today, and 14,904 will sell tomorrow.
This is the average number of homes that sell each and every day in this country, according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report.NAR reported that sales are at an annual rate of 5.44 million. Divide that number by 365 (days in a year) and we can see that, on average, over 14,904 homes sell every day.
The report from NAR also revealed that there is currently only a 4.2-month supply of inventory available for sale (6-months inventory is considered ‘historically normal’).
This means that there are not enough homes available for sale to satisfy all of the buyers who currently are out in the market in record numbers.
We realize that you want to get the fair market value for your home. However, if it hasn’t sold in today’s active real estate market, perhaps you should reconsider your current asking price.
One of the main reasons why For Sale By Owners (FSBOs) don’t use a real estate agent is because they believe they will save the commission an agent charges for getting their house on the market and selling it. A new study by Collateral Analytics, however, reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”
Why would FSBOs net less money than if they used an agent?
The study makes several suggestions:
“There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids on with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
“Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.
Three conclusions from the study:
FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
The differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%.
The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.
If you are thinking of selling, FSBOing may end up costing you money instead of saving you money.
Recently there has been a lot of talk about home prices and if they are accelerating too quickly. As we mentioned before, in some areas of the country, seller supply (homes for sale) cannot keep up with the number of buyers who are out looking for homes, which has caused prices to rise.
The great news about rising prices, however, is that according to CoreLogic’sHomeowner Equity Report, the average American household gained over $14,000 in equity over the course of the last year, largely due to home value increases.
The map below was created using the same report from CoreLogic and shows the average equity gain per mortgaged home during the 1st quarter of 2017 (the latest data available).
For those who are worried that we are doomed to repeat 2006 all over again, it is important to note that homeowners are investing their new-found equity in their homes and themselves, not in depreciating assets.
The added equity is helping families put their children through college, invest in starting small businesses, pay off their mortgages sooner and even move up to the home that will better suit their needs now.
If you are a homeowner looking to take advantage of your home equity by moving up to your dream home, let’s get together to discuss your options!