Home Values: Where Are They Headed Over the Next Five Years?

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

• Home values will appreciate by 4.1% in 2015.
• The cumulative appreciation will be 18.1% by 2019.
• That means the average annual appreciation will be 3.4% over the next 5 years.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 10.5% by 2019.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

Content provided by Keeping Current Matters

217,726 Reasons to Buy a Home Now!

The inaugural Opportunity Cost Report was released recently by realtor.com. The report explained that “with interest rates and home prices expected to climb in the next year, the financial penalties of delaying or forgoing a home purchase in today's market have become very steep”.

The report estimates that, based on today's dollars, the average purchaser would accumulate $217,726 in increased wealth over a 30-year period.

(You can get the projected wealth increase for almost 100 metros here.)

What could this mean to someone sitting on the fence waiting to buy?

Experts believe that both home prices and mortgage interest rates will increase over the next twelve months. Obviously, if this does happen, the monthly cost of a home a year from now will be dramatically higher than it is today. The Opportunity Cost Reportbreaks down exactly how much a purchaser could lose over increments of one year and three years. Here are the results based on an average purchaser in the U.S. delaying their purchase:

Bottom Line

If you are ready, willing and able to buy a home, waiting doesn't make sense.

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Would You Ask Your House Guests to Sign A Lease Agreement?

According to a June 11, 2015 article in the Sun Sentinel, by Gary M. Singer, a Florida attorney who is an expert in Real Estate law, owners cannot remove a squatter from their property without a court order, even if that person moves into your property without your knowledge or permission. You are not allowed to remove the person/s or their belongings and you are not allowed to change the locks or turn off utilities. Interestingly enough this also applies to your guests in your own home!

In order to remove the squatter you will need to file an “unlawful detainer” or “ejection” lawsuit depending on the situation to get the police to help. Mr. Singer recommends you sign a written lease agreement with anyone who is staying with you for more than a few days. 

As those of us who live in Florida know all too well, we are usually the hotel of choice for family and friends visiting from the north during those cold winter months. Can you just imagine the look on your guest’s faces the next time they come to stay and you whip out a written lease agreement for them to sign? In my opinion I'd rather be safe than sorry!

Link to article at Florida Association of Realtors

5 Reasons You Shouldn’t For Sale By Owner

In today's market, with homes selling quickly and prices rising some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies which work for the buyer and will almost always find some problems with the house.
• The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

• 43% on the internet
• 9% from a yard sign
• 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

5. You Net More Money when Using an Agent

Many homeowners believe that they will 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 the commission.

Studies have shown that the typical house sold by the homeowner sells for $208,000 while the typical house sold by an agent sells for $235,000. This doesn’t mean that an agent can get $27,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

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Guess Where Rents Are Heading?

Each month, many people are faced with the decision of renewing their rental lease for another year or purchasing their first home. One of the questions that must be answered before they make a decision is – “Where are rents headed?”

The Wall Street Journal recently wrote an article on this issue. Their conclusion:

“Apartment rental increases slowed in the first quarter from a year earlier, but the move is more likely a temporary blip than the beginning of a long-term respite for renters.”

The article goes on to quote Ryan Severino, a senior economist at Reis:

“I wish I had a better story to tell renters these days, but I think they’re in for some rent increases for the foreseeable future.”

Probably the most interesting part of the article came in the Comment Section where a proud landlord proclaimed:

“As a landlord I can tell you I don't pay property tax. I don't pay for repairs. The tenant pays. I get my money off the top.”

Here is a chart showing rent increases over the last 25+ years:

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The #1 Reason to Buy Right Now – THE MONEY!!

People often ask whether they should buy a home now or wait. Recently released data suggests that waiting may not make sense as prices seem to again be on the rise. Let’s take a look at some of the data and commentary on the subject:

Ed Stansfield, chief property economist at Capital Economics:

“The current tightness of supply conditions would normally be consistent with much faster price growth. The continued steady growth in home sales that we expect this year will only add to this upward pressure on prices.”

Case Shiller Home Price Index

“The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.1% annual gain in March 2015 … with a 0.8% increase for the month.”

Anand Nallathambi, CEO of CoreLogic

“All signs are pointing toward continued price appreciation throughout 2015… Tight inventories, job growth and the impact of demographics and household formation are pushing price levels in many states toward record levels.”

Danielle Hale, Director of Housing Statistics at NAR

“Even without further acceleration, the pace of price growth remains too high. Strong buyer demand and low inventories coupled with relatively low new construction are helping to push prices up, keeping the housing market tipped in favor of sellers.”

FHFA Principal Economist Andrew Leventis

"The first quarter saw strong and widespread home price growth throughout most of the country. Home prices are now, on average, roughly 20 percent above where they were three years ago. This run-up has been historically exceptional and is particularly notable in light of the limited household income growth and modest rate of overall inflation observed during that same time period."

Bottom Line

If you are planning on buying a home in the near future, waiting probably doesn’t make sense from a purely pricing standpoint.

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We Need You(r House)!!

Though the real estate market has improved, we still have one item holding it back from a full recovery – a robust supply of homes for sale. Demand has increased dramatically. At the same time, housing inventory is decreasing especially at the lower price points.

The National Association of Realtors (NAR) recently revealed that there is a pent-up seller demand caused by the uncertainty created by the housing crisis of the last decade.

What does that mean to you?

Houses listed today sell quickly. With prices still below peak values of 2007 in many parts of the country and mortgage interest rates at historic lows, this may be the perfect time for your family to make the move to the dream house you always wanted – whether that’s a larger home or that vacation/retirement home you have been looking at.

What does that mean to the economy?

Housing has always been an essential part of the U.S. economy. As we have reportedbefore, real estate not only provides housing for families. It is often the greatest source of wealth and savings for many. The recent increase in real estate sales has led to an increase in real estate prices. This has increased the value of everyone’s' home, whether they are selling or not. This leads to an increase in consumer confidence which in turn leads to an increase in consumer spending. Plus, each home sale automatically puts money into the economy.

NAR compiled data from research conducted by the Bureau of Economic Analysis & Macroeconomic Advisors on the economic impact of a home purchase.

After reviewing the data, they concluded that the total economic impact of a typical home sale in the United States is an astonishing $52,205.

The more homes that sell, the better the economy.

Bottom Line

In order for the U.S. economy to get better, we need to sell more homes. Perhaps, it makes sense for one of those homes to be yours.

If you have considered selling but are still a little nervous, now might be the time to sit down with a real estate professional familiar with your market and see what your options truly are.

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This Advice on Homeownership Hasn’t Changed in 200 Years

Last month, Keeping Current Matters reported that billionaire John Paulson believes in the financial advantages of homeownership. He has often repeated:

"I think, from an individual perspective, the best deal investment you can make is to buy a primary residence that you're the owner-occupier of.”

However, he has not been the only billionaire to give such advice. As a matter of fact, that same advice has been given by people of wealth throughout the history of our nation.

Here is a quote often attributed to Theodore Roosevelt, 26th President of the United States and billionaire real estate developer:

“Every person who invests in well-selected real estate … adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.”

Andrew Carnegie, one of the richest entrepreneurs in American history said:

“90% of all millionaires became so through owning real estate.”

Bottom Line

If the same advice has been given by the wealthiest people in each era of our country’s history, perhaps we should take it.

Content provided by Keeping Current Matters

Existing Home Sales Skyrocket!

Content courtesy of Keeping Current Matters

Buying is Cheaper Than Renting in 76% of Housing Markets

According to a recent report by Realty Trac, it is now cheaper to buy than rent in 3 of 4 housing markets in the US. Out of 461 counties analyzed nationwide, house payments on a median priced home were less than renting a similar home in 351 of those counties.

3 of the 10 least affordable rental markets mentioned in the report are located in Florida; Broward, Miami-Dade and Hernando counties.

For you investors out there, the 10 counties listed with the highest rental returns, included 2 counties in the Tampa Bay area; Hernando and Pasco. No counties in Florida were included in the 10 counties listed with the lowest rental returns.

Wondering whether now is the right time to buy? Please call 813-230-5804 for a free no obligation, consultation today!

Link to the full Realty Trac article here.

Blog Site Updates in Progress!

Hello Everyone!

I wanted to let you know that some of the links at this site are currently in transition. If you experience problems or would like access to the information at a link that is not working, please feel free to contact me directly for that information at 813-230-5804 or smithersells@yahoo.com. All updates should be completed by April 30, 2015.

Thank you for your patience and understanding!

Wishing You All The Best!

Susan Smither

Selling Your House? Price it Right Up Front!

In today’s market, where demand is outpacing supply in many regions of the country, pricing a house is one of the biggest challenges real estate professionals face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.

There is no “later.”

Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes.

John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Pricepublished in Real Estate Economics revealed:

“Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”

Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges.

Don’t build “negotiation room” into the price.

Many sellers say that they want to price their home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house.

Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it!

A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house.

Look at it this way: if you only receive one offer, you are set up in an adversarial position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation?

The Price is Right

Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home. You need an agent that will tell you what you need to know rather than what you want to hear. This will put you in the best possible position.

Content provided by Keeping Current Matters

Think You Need A Lot Of Cash to Buy A Home?

Today, Freddie Mac is scheduled to start buying mortgages with down payments of only three percent – the first time down payments have been this low on Freddie Mac loans in nearly five years. The program is called Freddie Mac Home Possible AdvantageSM.

In a recent Executive Perspectives, Dave Lowman EVP, Single-Family Business Freddie Mac, explained the potential impact this program will have on the housing market:

“There's a new reason Realtors and lenders may expect more qualified borrowers at the closing table during this spring's home buying season. In addition to low mortgage rates and rising job growth, the down payment hurdle is starting to shrink for creditworthy borrowers, including first-time homebuyers.”

And the mortgage industry agrees with Mr. Lowman. In a recent survey of mortgage originators by the National Association of Realtors (NAR), it was revealed that most loan officers believe the move to a lower down payment will increase access to mortgage credit. Here are that survey’s findings:

Bottom Line

Many potential buyers are “ready and willing” to buy a home but have been afraid they may not be “able” because of a lack of adequate savings for a down payment. Check with a local real estate or mortgage professional to understand what the new rules may mean to you.

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New Lower Price! 513 W 127th Ave, Tampa, FL 33612

Get Directions Click Here Description Features Photos Maps & Local Schools Virtual Tour $ Click for current price 3 BEDROOMS 2 BATHROOMS (2 full) 2150 Square Feet Come see this inviting and well maintained home in the desirable Forest Hills area. Your home is located ½ mile from Babe Zaharias golf course in a quiet neighborhood with majestic oak trees and sidewalks. One of the first things you’ll notice is the gorgeous paver driveway. You’ll find that pavers and stonework complement this attractive home from front to back. Enjoy your remodeled kitchen with eat-in space, wood cabinets, granite countertops and Kohler fixtures. Nearby is a huge family/dining room area with a wood burning fireplace great for those chilly evenings! Your amazing 600 sq.ft. master suite has an oversized bedroom, large closet and a luxurious master bath. Your master bath includes a whirlpool Pearl tub with in-line heater, Kohler fixtures, skylight, imported tile, walk-in shower with built-in bench and separate water closet. Upgrades like dimensional shingles, newer windows, extra attic insulation, separate A/C and hot water heater for the master suite, solar tube in hall bath, newer high efficiency main A/C, new hot water heater, vinyl and aluminum soffit and fascia, 25 year exterior paint and upgraded plumbing and electric in kitchen and master suite make this home special. Sip your morning coffee in the screened lanai or on the open wood deck and enjoy the peaceful, private back yard filled with beauty & wildlife. Don’t miss the wonderful 12x13 workshop with cabinets, benches and storage! This central Tampa location has easy access to interstate & other amenities with no HOA or CDD fees. Tampa Homes For Sale Search All Homes for Sale New Construction Homes for Sale Homes Close to Where You Work Avoid Foreclosure What is Your Home Worth? Susan Smither Berkshire Hathaway HomeServices Florida Properties Group 813-230-5804 smithersells@yahoo.com L2L