Real Estate Continues to Show Unprecedented Strength This Year
The 2020 housing market has surpassed all expectations and continues to drive the nation’s economic recovery. The question is, will this positive trend continue throughout the rest of the year, especially given the uncertainty around the current health crisis, the upcoming election, and more?
Here’s a look at what several industry-leading experts have to say.
“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market…Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”
“Homeowners’ balance sheets continue to be bolstered by home price appreciation, which in turn mitigated foreclosure pressures…Although the exact contours of the economic recovery remain uncertain, we expect current equity gains, fueled by strong demand for available homes, will continue to support homeowners in the near term.”
“Zillow’s predictions for seasonally adjusted home prices and pending sales are more optimistic than previous forecasts because sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand.
The pandemic also pushed the buying season further back in the year, adding to recent sales. Future sources of uncertainty including lapsed fiscal relief, the long-term fate of policies supporting the rental and mortgage market, and virus-specific factors, were incorporated into this outlook.”
Bottom Line
Many economists are in unison, indicating the housing market will continue to fuel the economy through the end of the year, maintaining this unprecedented strength.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
6 Reasons You’ll Win by Selling with a Real Estate Agent This Fall
There are many benefits to working with a real estate professional when selling your house. During challenging times, like what we face today, it becomes even more important to have an expert you trust to help guide you through the process. If you’re considering selling on your own, known in the industry as a For Sale by Owner (FSBO), it’s critical to consider the following:
1. Your Safety Is a Priority
Your family’s safety should always come first, and that’s more crucial than ever given the current health situation in our country. When you FSBO, it is incredibly difficult to control entry into your home. A real estate professional will have the proper protocols in place to protect not only your belongings but your family’s health and well-being too. From regulating the number of people in your home at one time to ensuring proper sanitization during and after a showing, and even facilitating virtual tours for buyers, real estate professionals are equipped to follow the latest industry standards recommended by the National Association of Realtors (NAR) to help protect you and your family.
2. A Powerful Online Strategy Is a Must to Attract a Buyer
Recent studies from NAR have shown that, even before COVID-19, the first step 44% of all buyers took when looking for a home was to search online. Throughout the process, that number jumps to 93%. Today, those numbers have grown exponentially. Most real estate agents have developed a strong Internet and social media strategy to promote the sale of your house. Have you?
3. There Are Too Many Negotiations
Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:
The buyer, who wants the best deal possible
The buyer’s agent, who solely represents the best interest of the buyer
The inspection companies, which work for the buyer and will almost always find challenges with the house
The appraiser, if there is a question of value
As part of their training, agents are taught how to negotiate every aspect of the real estate transaction and how to mediate the emotions felt by buyers looking to make what is probably the largest purchase of their lives.
4. You Won’t Know if Your Purchaser Is Qualified for a Mortgage
Having a buyer who wants to purchase your house is the first step. Making sure they can afford to buy it is just as important. As a FSBO, it’s almost impossible to be involved in the mortgage process of your buyer. A real estate professional is trained to ask the appropriate questions and, in most cases, will be intimately aware of the progress being made toward a purchaser’s mortgage commitment.
Further complicating the situation is how the current mortgage market is rapidly evolving because of the number of families out of work and in mortgage forbearance. A loan program that was available yesterday could be gone tomorrow. You need someone who is working with lenders every day to guarantee your buyer makes it to the closing table.
5. FSBOing Has Become More Difficult from a Legal Standpoint
The documentation involved in the selling process has increased dramatically as more and more disclosures and regulations have become mandatory. In an increasingly litigious society, the agent acts as a third-party to help the seller avoid legal jeopardy. This is one of the major reasons why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
6. You Net More Money When Using an Agent
Many homeowners believe they’ll save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save on the commission.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, the seller may even net less money from the sale. The study found the difference in price between a FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure:
“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.”
The more buyers that view a home, the greater the chance a bidding war will take place.
Bottom Line
Listing on your own leaves you to manage the entire transaction by yourself. Why do that when you can hire an agent and still net the same amount of money? Before you decide to take on the challenge of selling your house alone, let’s connect to discuss your options.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
Earlier this year, many economists and market analysts were predicting an apocalyptic financial downturn that would potentially rattle the U.S. economy for years to come. They immediately started to compare it to the Great Depression of a century ago. Six months later, the economy is still trying to stabilize, but it is evident that the country will not face the total devastation projected by some. As we continue to battle the pandemic, forecasts are now being revised upward. The Wall Street Journal (WSJ) just reported:
“The U.S. economy and labor market are recovering from the coronavirus-related downturn more quickly than previously expected, economists said in a monthly survey.
Business and academic economists polled by The Wall Street Journal expect gross domestic product to increase at an annualized rate of 23.9% in the third quarter. That is up sharply from an expectation of an 18.3% growth rate in the previous survey.”
What Shape Will the Recovery Take?
Economists have historically cast economic recoveries in the form of one of four letters – V, U, W, or L.
A V-shaped recovery is all about the speed of the recovery. This quick recovery is treated as the best-case scenario for any economy that enters a recession. NOTE: Economists are now also using a new term for this type of recovery called the “Nike Swoosh.” It is a form of the V-shape that may take several months to recover, thus resembling the Nike Swoosh logo.
A U-shaped recovery is when the economy experiences a sharp fall into a recession, like the V-shaped scenario. In this case, however, the economy remains depressed for a longer period of time, possibly several years, before growth starts to pick back up again.
A W-shaped recovery can look like an economy is undergoing a V-shaped recovery until it plunges into a second, often smaller, contraction before fully recovering to pre-recession levels.
An L-shaped recovery is seen as the worst-case scenario. Although the economy returns to growth, it is at a much lower base than pre-recession levels, which means it takes significantly longer to fully recover.
Many experts predicted that this would be a dreaded L-shaped recovery, like the 2008 recession that followed the housing market collapse. Fortunately, that does not seem to be the case.
The same WSJ survey mentioned above asked the economists which letter this recovery will most resemble. Here are the results:
Wall Street Journal Survey
What About the Unemployment Numbers?
It’s difficult to speak positively about a jobs report that shows millions of Americans are still out of work. However, when we compare it to many forecasts from earlier this year, the numbers are much better than most experts expected. There was talk of numbers that would rival the Great Depression when the nation suffered through four consecutive years of unemployment over 20%.
The first report after the 2020 shutdown did show a 14.7% unemployment rate, but much to the surprise of many analysts, the rate has decreased each of the last three months and is now in the single digits (8.4%).
Economist Jason Furman, Professor at Harvard University‘s John F. Kennedy School of Government and the Chair of the Council of Economic Advisers during the previous administration, recently put it into context:
“An unemployment rate of 8.4% is much lower than most anyone would have thought it a few months ago. It is still a bad recession but not a historically unprecedented event or one we need to go back to the Great Depression for comparison.”
The economists surveyed by the WSJ also forecasted unemployment rates going forward:
2021: 6.3%
2022: 5.2%
2023: 4.9%
The following table shows how the current employment situation compares to other major disruptions in our economy:
Unemployment Comparison
Bottom Line
The economic recovery still has a long way to go. So far, we are doing much better than most thought would be possible.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
Earlier this year, realtor.com announced the release of the Housing Recovery Index, a weekly guide showing how the pandemic has impacted the residential real estate market. The index leverages a weighted average of four key components of the housing industry by tracking each of the following:
Housing Demand – Growth in online search activity
Home Price – Growth in asking prices
Housing Supply – Growth of new listings
Pace of Sales – Difference in time-on-market
The index compares the current status “to the January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market’s index value, the higher its recovery and vice versa.”
The graph below charts the index by showing how the real estate market started out strong in early 2020, and then dropped dramatically at the beginning of March when the pandemic paused the economy. It also shows the strength of the recovery since the beginning of May.
Housing Market Recovery Index
Today, the index stands at its highest point all year, including the time prior to the economic shutdown.
The Momentum Is Still Building
Though there is some evidence that the overall economic recovery may be slowing, the housing market is still gaining momentum. Zillow tracks the number of homes that are put into contract on a weekly basis. Their latest report confirms that buyer demand is continuing to dramatically outpace this same time last year, and the percent increase over last year is growing.
Percent Change in Newly Pended Deals
Clearly, the housing market is not only outperforming the grim forecasts from earlier this year, but it is also eclipsing the actual success of last year.
Frank Martell, President and CEO of CoreLogic, explains it best:
“On an aggregated level, the housing economy remains rock solid despite the shock and awe of the pandemic.”
Bottom Line
Whether you’re considering buying or selling, staying on top of the real estate market over the coming months will be essential to your success.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
There has been much talk around the possibility that Americans are feeling less enamored with the benefits of living in a large city and now may be longing for the open spaces that suburban and rural areas provide.
In a recent Realtor Magazinearticle, they discussed the issue and addressed comments made by Lawrence Yun, Chief Economist for the National Association of Realtors (NAR):
“While migration trends were toward urban centers before the pandemic, real estate thought leaders have predicted a suburban resurgence as home buyers seek more space for social distancing. Now the data is supporting that theory. Coronavirus and work-from-home flexibility is sparking the trend reversal, Yun said. More first-time home buyers and minorities have also been looking to the suburbs for affordability, he added.”
NAR surveyed agents across the country asking them to best describe the locations where their clients are looking for homes (they could check multiple answers). Here are the results of the survey:
47% suburban/subdivision
39% rural area
25% small town
14% urban area/central city
13% resort community/recreational area
According to real estate agents, there’s a strong preference for less populated locations such as suburban and rural areas.
Real Estate Brokers and Owners Agree
Zelman & Associates surveys brokers and owners of real estate firms for their monthly Real Estate Brokers Report. The last report revealed that 68% see either a ‘moderate’ or ‘significant’ shift to more suburban locations. Here are the results of the survey:
Real Estate Brokers See a Shift Toward Suburbia
Bottom Line
No one knows if this will be a short-term trend or an industry game-changer. For now, there appears to be a migration to more open environments.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
With so few houses for sale today and low mortgage rates driving buyer activity, bidding wars are becoming more common. Multiple-offer scenarios are heating up, so it’s important to get pre-approved before you start your search. This way, you can put your best foot forward – quickly and efficiently – if you’re planning to buy a home this season.
Javier Vivas, Director of Economic Research at realtor.com,explains:
“COVID-19 has accelerated earlier trends, bringing even more buyers than the market can handle. In many markets, fierce competition, bidding wars, and multiple offer scenarios may be the common theme in the weeks to come.”
Here are three things you can do to make your offer a competitive one when you’re ready to make your move.
1. Be Ready
A recent survey shows that only 52% of active homebuyers obtained a pre-approval letter before they began their home search. That means about half of active buyers missed out on this key part of the process.
Buyers who are pre-approved are definitely a step ahead when it’s time to make an offer. Having a pre-approval letter indicating you’re a qualified buyer shows sellers you’re serious. It’s often a deciding factor that can tip the scale in your direction if there’s more than one offer on a home. It’s best to contact a mortgage professional to start your pre-approval process early, so you’re in the best position right from the start of your home search.
2. Present Your Best Offer
In a highly competitive market, it’s common for sellers to pick a date and time to review all offers on a house at one time. If this is the case, you may not have an opportunity to negotiate back and forth with the sellers. As a matter of fact, the National Association of Realtors (NAR) notes:
“Not only are properties selling quickly, but they are also getting more offers. On average, REALTORS® reported nearly three offers per sold property in July 2020.”
Make sure the offer you’re presenting is the best one the sellers receive. A real estate professional can help you make sure your offer is a fair and highly competitive one.
3. Act Fast
With existing homes going like hotcakes, there’s no time to waste in the process. NAR reports how the speed of home sales is ramping up:
“Properties typically remained on the market for 22 days in July, seasonally down from 24 days in June and from 29 days in July 2019. Sixty-eight percent of homes sold in July 2020 were on the market for less than a month.”
In addition, NAR notes:
“Total existing-home sales…jumped 24.7% from June to a seasonally adjusted annual rate of 5.86 million in July. The previous record monthly increase in sales was 20.7% in June of this year. Sales as a whole rose year-over-year, up 8.7% from a year ago (5.39 million in July 2019).”
As you can see, the market is gaining steam. For two consecutive months houses have sold very quickly. Essentially, you may not have time to sleep on it or shop around when you find a home you love. Chances are, someone else loves it too. If you take your time, it may not be available when you’re ready to commit.
Bottom Line
The housing market is very strong right now, and buyers are scooping up available homes faster than they’re coming to market. If you’re planning to purchase a home this year, let’s connect to discuss the trends in our current area, so you’re ready to compete – and win.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
Why Is It so Important to Be Pre-Approved in the Homebuying Process?
You may have heard that pre-approval is a great first step in the homebuying process. But why is it so important? When looking for a home, the temptation to fall in love with a house that’s outside your budget is very real. So, before you start shopping around, it’s helpful to know your price range, what you’re comfortable within a monthly mortgage payment, and ultimately how much money you can borrow for your loan. Pre-approval from a lender is the only way to do this.
According to a recent survey from realtor.com, many buyers are making the mistake of skipping the pre-approval step in the homebuying process:
“Of over 2,000 active home shoppers who plan to purchase a home in the next 12 months, only 52% obtained a pre-approval letter before beginning their home search, which means nearly half of home buyers are missing this crucial piece of paperwork.”
This paperwork (the pre-approval letter) shows sellers you’re a qualified buyer, something that can really help you stand out from the crowd in the current ultra-competitive market.
How competitive is today’s market? Extremely – especially among buyers.
With limited inventory, there are many more buyers than sellers right now, and that’s fueling the competition. According to the National Association of Realtors (NAR), homes are receiving an average of 2.9 offers for sellers to negotiate, so bidding wars are heating up.
Pre-approval shows homeowners you’re a serious buyer. It helps you stand out from the crowd if you get into a multiple-offer scenario, and these days, it’s likely. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war and land the home of your dreams.
Danielle Hale, Chief Economist for realtor.com notes:
“For ‘a buyer in a competitive market, it’s typically essential to have pre-approval done in order to submit an offer, so getting it done before you even look at homes is a smart move that will enable a buyer to move fast to put an offer in on the right home.’”
In addition, today’s housing market is also changing from moment to moment. Interest rates are low, prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals (a loan officer and a real estate agent) making sure you take the right steps along the way and can show your qualifications as a buyer at the time you find a home to purchase.
Bottom Line
In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. If you’re ready to buy this year, let’s connect before you start searching for a home.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
When shelter-in-place orders brought the economy to a screeching halt earlier this year, many believed the residential housing market would follow suit. Countless analysts predicted buyer demand would disappear and home values would depreciate for the first time in almost a decade. That, however, didn’t happen. It appears the opposite is taking place.
After the bottom fell out of the real estate market immediately following the shutdown, it has come roaring back – and seems to still be gaining steam. Here’s a look at two recent reports – one from the National Association of Home Builders (NAHB) and one from the National Association of Realtors (NAR) – showing this growing strength.
Builder Confidence Hits All-Time High
Last week, it was reported that applications for new home purchases with home builders were 39% higher than in July of 2019. That has builder confidence soaring.
Each month, NAHB releases its Housing Market Index, a survey of NAHB members who rate market conditions for the sale of new homes at the present time and over the next six months, as well as prospective buyer traffic for new homes.
This month, they reported that builder confidence in the market for newly-built single-family homes increased to the highest reading in the 35-year history of the series. NAHB Chairman, Chuck Fowke, explained:
“The demand for new single-family homes continues to be strong, as low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs…Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020.”
The number of newly constructed homes being built will be almost at the same level as last year, even though the economic shutdown crushed home building earlier in the year.
Existing Homes Are Also Selling Like Hotcakes
Last Friday, NAR released its Existing Home Sales Report. The report revealed that month-over-month salesincreased by 24.7%, setting another record for the category. The Wall Street Journalreported that the increase crushed expert forecasts:
“Economists surveyed by The Wall Street Journal expected a 14.2% monthly increase in sales of previously-owned homes, which make up most of the housing market.”
Home sales increased by 8.7% year-over-year.
Lawrence Yun, Chief Economist for NAR, explained how the resale market is just as hot as the new construction market:
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days. With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”
In addition, the Housing Market Recovery Index, which is released monthly by realtor.com, also showed the market is recovering nicely. The latest index reading was 104.8, which means the housing market is doing better than it was in January and February of this year. As a reference, the highest point in the index was a 106.5 in early March, just prior to the health crisis setting in.
Bottom Line
Both the newly constructed and existing home sale markets are posting numbers greater than a year ago. Real estate is back. If you’re thinking of buying or selling, let’s connect so you have the expert counsel you need along the way.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
According to trending data, searches for key real estate topics are skyrocketing online.
Clearly, lots of people have questions about buying a home, and other topics related to the process.
Working with a trusted real estate professional will help you create the most personalized and helpful experience. Let’s connect so you have the guidance you need along the way.
Contact us:
PHP Houses
142 W Lakeview Ave
Unit 1030
Lake Mary, FL 32746
Ph: (407) 519-0719
Fax: (407) 205-1951
email: info@phphouses.com
THE INFORMATION PRESENTED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL, FINANCIAL, OR AS ANY OTHER TYPE OF ADVICE.
