Discussing how quickly homes are selling, home prices, the percentage of college grads moving in with their parents, optimism and concerns for housing plus more!
How Long Is It Taking to Sell a Home
Nationally, homes typically went under contract in 30 days in March 2018 according to a recent NAR survey of over 50,000 Realtors. Check out this map showing the median days on market for each state:
There are many different things that a seller must do to ensure their home sells quickly and your Realtor should tell you what you need to do to ensure that your home sells quickly and for the highest amount possible based on current market conditions.
I track the average days on market instead of the median days on market. For those that missed the latest Anderson County SC Market Report, the homes that sold last week were on the market for an average of 81 days.
This is for all types of homes in all price ranges in ALL of Anderson County. There is a wide range of homes being sold each week and this is just an indicator of the overall market.
If you have questions about a specific property, you can Contact Me!
Owners Opinion of Home Values Close to Appraisers
- Smallest difference between appraiser and owner opinions of home value in 3 years
- Appraised home values 0.33% lower than homeowners estimates in April
- US home values up 6.47% year-over year
- US home values decreased 0.5% from the previous month
Bill Banfield, Quicken Loans Executive Vice President of Capital Markets, said:
The appraisal is one of the most important, although sometimes least predictable, parts of the mortgage process. The Home Price Perception Index is a way to illustrate the differences of opinion, and these differences affect everything from the type of mortgage a borrower can get to the expectations a seller has about the proceeds available upon sale of their home.
Time will tell if the slightly higher interest rates in 2018 start to slow demand or if the inventory shortage ends up being a larger contributor to price changes.
While this is interesting, Quicken is talking about the entire US. The small dip from the previous month does not concern me too much since Quicken reported an increase YoY.
As always, you must look at what is happening locally! In Anderson County SC, the average sold home price in April 2018 was 0.18% higher than April 2017.
Remember that the home MUST appraise or the deal could go up in flames. Not always as there are ways to deal with this situation but they involve getting a buyer to pony up the difference between the appraised value and the contract price.
Or the seller may agree to take less. Or you may be able to get the appraiser to look at the comps again to get the appraised value a little higher.
Appraisals, inspections and surveys can all cause a sale to implode. When the stuff starts hitting the fan is when your Realtor will show you why using a real estate professional is a very smart move…
Out of the Dorm and Back to Home
The median young, college-educated person earns more than the median American worker, but the inflation-adjusted wage growth of recent grads has been slightly worse (-2.4 percent) since 2005.
Despite relatively high wages, more than a quarter of young college graduates live with a parent, up from nineteen percent before the recession.
Despite the enormous income advantage of twenty-somethings who hold college degrees, they have not been spared the wage growth woes of the rest of the country. Nationally, the typical employed adult made 1.2 percent less in 2016 than they did in 2005; the median recent grad fared even worse, making 2.4 percent less.
And even as wage growth stagnates, rents and homes values nationwide keep going up – to say nothing of mounting student debt. This might help explain why more than a quarter (28.2 percent) of U.S. twenty-somethings with college degrees live with a parent, up 8.8 percentage points in a little more than a decade.
While this is a change from the past, there is nothing wrong with someone moving back in with their parents. They need to get their finances squared away as they transition to a new stage in their life.
Besides, they may be moving to another area for a new career so this could make sense for many. I would think they need to concentrate on landing a good job, paying down debt while saving to buy a home in the future.
Optimism for Housing with a Side of Underlying Concerns
From James Rosseau, chief commercial officer at LegalShield:
Although LegalShield data suggest housing starts should continue to improve in the coming months, several headwinds facing construction activity have worsened in recent weeks. The price of framing lumber has risen over 40 percent from a year ago due to import tariffs, while confrontations with key U.S. trading partners, particularly China, have also led to increased costs for steel and aluminum.
Rising interest rates are another potential reason for concern, as the average 30-year fixed-rate mortgage climbed above 4.5 percent for the first time since 2013. For the time being, however, we are cautiously optimistic about new housing construction in 2018.
Financial stress is likely to remain subdued while consumer confidence should remain elevated over the next one to three months due to the combination of low unemployment, reduced tax burden, and slowly rising wages. Although interest rates could become more concerning for subprime borrowers over the next 12 to 18 months if they continue to rise as expected, consumers’ finances are generally healthy and show little sign of worsening in the short term.
Regular readers have already heard warnings about these underlying concerns several times.
Still, Rosseau is optimistic and so am I…
Improvements in the Mortgage Numbers
Snippet from the latest HMDA data from the FFIEC:
From 2016 to 2017, the share of first-lien home purchase loans for 1–4 family, site-built, owner-occupied properties made to low- and moderate-income borrowers (those with income of less than 80 percent of area median income) rose slightly from 26.2 percent to 26.3 percent, and the share of refinance loans to low- and moderate-income borrowers increased from 16.9 percent to 22.9 percent.
It is good to see the improvement in purchase loans but it is really too small to get very excited about. But winning by 1 point is still a win…
Well that is all I have time for today. Please be awesome and share this article on Facebook, Twitter or Google!