Discussing home owner’s opinions of the value of their home, home price growth, a possible shift in the housing market, why selling your home this Fall could be your best option and much more!
Perception Approaches Reality
From Quicken Loans:
For the second consecutive month, home value perceptions remained steady with owners barely overvaluing their home – at a national level. In September, the average appraisal was only 0.29 percent less than what owners expected, according the Quicken Loans National Home Price Perception Index (HPPI).
Home values rose 0.35% nationally in September, and posted a 5.69% year-over-year increase, according to the Quicken Loans HVI
It is great to see home owners being realistic about the value of their home. One of the worst things that a seller can do is to overprice their home.
As far the increase in home prices reported by Quicken, this is talking about the entire US and may not reflect what is happening in your local market. As always, an experienced local Realtor is going to be your best source for what is happening locally and the current market value of a specific home.
An Increase in Inventory?
As we head into the fall, the real estate market continues the transition toward inventory recovery as a record number of new listings enter the market. While listings continue to sell at a feisty pace, total inventory is now virtually flat, and new listings are up 8 percent over last year. Additionally, price gains continue to decelerate, with average list prices up 4.4 percent, half the pace seen this time last year.
This September, total active inventory increased over last month, allowing the market to reach nearly the same levels of inventory seen last September. Inventory grew 0.4 percent over August, which is a shift from the typical seasonal decrease in the fall. As a result, inventory is down only 0.2 percent over last year, setting up an inflection point for recovery nationally.
An increase in inventory is great but this is talking about all of the homes for sale in the US and not what is happening in your local market. This is just ONE increase from the previous month AND you will notice that inventory is still down slightly compared to the same time last year.
Just like the report from Quicken, it does not tell you what is going on in your local market! In many areas/price ranges, there is still a shortage of homes for sale.
Which means that NOW is still a good time to sell a home:
Jobless Claims Increase
In the week ending October 6, the advance figure for seasonally adjusted initial claims was 214,000, an increase of 7,000 from the previous week’s unrevised level of 207,000. The 4-week moving average was 209,500, an increase of 2,500 from the previous week’s unrevised average of 207,000.
While this increase is both unexpected and bad, remain calm. Unemployment is still at a very healthy level and the economy is still humming along nicely.
Home Ownership and Millennials
Interesting findings in a recent Bank of America survey:
23- to 40-year-olds are placing homeownership above nearly all else, with 72 percent of millennials saying owning a home is a top priority. Homeownership is second only to being able to retire (80 percent), and far outranks getting married (50 percent) and having children (44 percent).
Furthermore, many millennials equate homeownership with personal (53 percent) and financial (45 percent) success. Prospective millennial buyers also associate the purchase of a home with being mature (47 percent), acting like an adult (47 percent), and feeling independent (36 percent).
Despite many reports in the past few years that millennials are not interested in owning a home, this certainly proves otherwise. However, this survey also found that many myths still stop some from pursuing home ownership.
One myth mentioned by the survey is having to put 20% down to buy a home. This is NOT always true and you need to discuss your options with a mortgage lender!
If buying a home makes sense for you, I strongly suggest that you educate yourself on home buying. Do NOT make the mistake of missing out on the wealth building and life changing effect of home ownership!
Number of Price Cuts Hits Highest Level in Years
The share of home listings with a price cut grew to its highest level since 2014. For much of the first half of 2018 the share of listings on Trulia with a price cut was largely unchanged from 2017, before shooting up in July and August. Coupled with home price growth that has begun to slow, and inventory levels that are creeping back up in some places, a higher rate of price cuts could be a critical third confirmation that things may finally be shifting in buyers’ favor.
I keep hearing that the we may be seeing the housing market shifting towards a buyer’s market. However, many of these articles skip over how mortgage rates have been increasing and how increasing rates hurt home buyers.
If buying a home today makes sense for you, do not let these articles fool you into wasting time. Get the ball rolling before mortgage rates increase any more since it could save you a bunch of money!