Discussing mortgage delinquencies and foreclosure starts, some interesting home sales statistics for October 2017, multifamily confidence and more!
Mortgage Delinquencies Rise for 2nd Consecutive Month
Black Knight just reported that the national delinquency rate increased for the second consecutive month. This increase is due to the recent hurricanes because delinquencies decreased in areas that were not affected by the hurricanes.
Also, the number of loans in active foreclosure continues to improve. The number of active foreclosures fell below 350,000 for the first time since 2006. Also, foreclosure starts fell 11.15% year over year.
Check out the chart:
I hate to think of all the people that are facing tough times because of the hurricanes in other areas of the country.
Highlights of the Latest REALTORS Confidence Index Survey
Check out the highlights for October 2017 from NAR Realtor Confidence Survey:
- First-time buyers accounted for 32% of home sales (33% in October 2016)
- Cash sales made up 20% of sales (22% in October 2016)
- Low inventory is still the major issue affecting transactions in October 2017
- 89% reported that home prices remained constant or rose in October 2017 compared to levels one year ago
- 20% of sales were for cash
- Properties were on the market for an average of 34 days
- Distressed properties (foreclosures or short sales) made up only 4% of sales
Check out some of the charts:
Remember that these are national or statewide statistics and the best thing for buyers and sellers to do is to consult with a local experienced Realtor! If you have questions about buying or selling real estate in the Anderson SC area, please contact me!
Multifamily Developer Confidence Weakens in 3rd Quarter
NAHB’s Multifamily Production Index (MPI) dropped 10 points to 46 in the third quarter of 2017. This is the lowest reading since the second quarter of 2011.
The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse.
After the housing market crashed and demand for rentals skyrocketed, multifamily construction was booming. Now it appears the pendulum is swinging the other direction.
Home Values Growing at 2X the Normal Rate
In October, the Zillow Home Value Index (ZHVI) climbed 6.5 percent from the previous year, to a median national home value of $203,400. That makes the median U.S. home $12,500 more valuable in October than it was a year ago.
October was the 15th consecutive month in which home values rose by at least 6 percent, which is double the roughly 3 percent annual rate of appreciation we might expect in a more “normal” market. The last time the market posted 3 percent annual growth was in January 2013, as values climbed slowly back from recession-era lows; a panel of real estate economists and experts say they expect the rate from January 2017 to December 2021 to average 3.4 percent.
2 big things to point out is this is talking about the entire country. More importantly, this is coming from Zillow so we must question if this report is as inaccurate as some of the Zestimates.
Besides, it is essential for buyers and sellers to rely on local real estate market expertise and not national reports. For those interested in the Anderson County SC market, check out the Weekly Market Reports.
Why Home Sellers Should Use a Real Estate Agent
I just touched upon several national reports that could mislead some people about the value of their home. It is very important that home sellers list their home with a local experienced Realtor.
Check out some of the advantages of using a Realtor to sell your home:
- Ensuring your home is properly marketed to the maximum number of potential buyers
- Professional negotiation skills and experience with the required paperwork
- Ample CYA against legal liabilities and just about any stumbling block
- Ensuring your home is shown to qualified buyers
- Selecting the proper list price
This is only a few of the reasons that sellers must use a real estate agent. One of the primary causes that home sellers don’t list their home is the commission.
You may be surprised to learn that using a Realtor might not cost you a thing!
Some recent research by Collateral Analytics uncovered that FSBOs don’t really save anything! In some cases, home seller could be losing money if they do not list with a Realtor.
In the research, they examined property sales in numerous real estate markets in 2016 and 2017. They found 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.
So why is it that FSBOs end up making less than home sellers that use an agent? Collateral Analytics explained why:
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.
If you are thinking about selling a home, it has been shown that the advantages of using a Realtor may not cost you anything. Not using a Realtor could cost you more and cause you unnecessary stress.
Beware the Marginal Buyer, Borrower and Renter
From Of Two Minds:
When times are good, the impact of the marginal buyer, borrower and renter on the market is often overlooked. By “marginal” I mean buyers, borrowers and renters who have to stretch their finances to the maximum to afford the purchase, loan or rent.
It’s difficult to assess how many recent buyers, borrowers and renters are marginal, but given the stagnation in household incomes and rising debt loads, it seems reasonable to guess that a substantial number of recent buyers, borrowers and renters are one lay-off or one missed bonus or one unexpected expense away from being unable to pay their mortgage, loan payment or rent.
This must read drives home why I am constantly saying buyers must not bite off more than they can chew.
Unemployment Claims Decrease
In the week ending November 18, the advance figure for seasonally adjusted initial claims was 239,000, a decrease of 13,000 from the previous week’s revised level. The previous week’s level was revised up by 3,000 from 249,000 to 252,000. The 4-week moving average was 239,750, an increase of 1,250 from the previous week’s revised average.
The numbers are still being affected by the hurricanes but the low level of claims suggests few layoffs.
That is it for today! Be sure to hit those share buttons!