![Low Housing Inventory Is a Sweet Spot for Sellers [INFOGRAPHIC] Simplifying The Market](https://files.keepingcurrentmatters.com/content/images/20230713/Low-Housing-Inventory-Is-a-Sweet-Spot-for-Sellers-KCM-Share.png)
Source: KCM
Even as some companies transition back into the office, remote work remains a popular choice for many professionals. So, if you currently enjoy working from home or hope to be able to soon, you’re not alone. According to a recent survey, most working professionals want to work either fully remote or hybrid (see below):
This trend is good news if you’re looking to buy a home because a remote or hybrid work setup can help you overcome some of today’s affordability and housing inventory challenges.
Remote or hybrid work opens up a world of opportunities. That’s because it allows you to broaden your search for your next home since you’re no longer limited to living close to your workplace. With the freedom to work from anywhere, you can explore more affordable areas that may be located farther away from bustling city centers or your office. This flexibility can be a game changer while higher mortgage rates are making it difficult for some homebuyers to afford a home.
An article from the New York Times (NYT) highlights how remote work can greatly assist you in overcoming that challenge:
“. . . take advantage of the opportunity remote work has presented to move to more affordable communities (either farther out in the suburbs, or in another part of the country).”
And, since the supply of homes for sale is still so low, another key challenge for you today may be finding something with all of the features you want and need. Because remote work allows you to broaden your search radius to include additional areas, you may actually have less trouble finding a home with the features you want the most because you’ll have a bigger pool of options to pick from.
Working remotely gives you the flexibility to find an affordable home with the features you want. In other words, you have a better chance of getting what you need without blowing your budget.
Working remotely not only gives you more flexibility in your job but also presents a great chance to broaden your search for a home. Since you’re not limited to a specific location, you have the opportunity to explore more options. Connect with a local real estate agent to discuss how this can expand your choices and help you find the perfect home.
Source: KCM
If you’re a homeowner ready to make a move, you may be thinking about using your current house as a short-term rental property instead of selling it. A short-term rental (STR) is typically offered as an alternative to a hotel, and they’re an investment that’s gained popularity in recent years.
While a short-term rental can be a tempting idea, you may find the reality of being responsible for one difficult to take on. Here are some of the challenges you could face if you rent out your house instead of selling it.
Successfully managing your house as a short-term rental takes a lot of time and effort. You’ll have to juggle tasks like dealing with reservations, organizing check-ins, and tackling cleaning, landscape, and maintenance duties. Any one of those can feel demanding, but all together it’s a lot to handle.
Short-term rentals experience high turnover rates, as new guests check in and out frequently. This home traffic can lead to increased wear and tear on your property—meaning you may need to make more frequent repairs or replace your furniture, fixtures, and appliances more often.
Think through your ability to make that level of commitment, especially if you plan to use a platform that advertises your rental listing. Most of them have specific requirements hosts must meet. An article from Bankrate explains:
“Managing a rental property can be time-consuming and challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord, which means screening tenants and fielding issues, among other responsibilities, or paying for a third party to take care of things instead.”
There’s a lot to consider before taking the leap and converting your house into a short-term rental. If you aren’t ready for the work it takes, it could be wise to sell instead.
As the short-term rental industry continues to grow, regulations have increased. Legal restrictions commonly include limits on the number of vacation rentals in a particular location. This is especially true in larger cities and tourist destinations where there may be concerns about overcrowding or housing shortages for permanent residents. Restrictions may also apply to the type of property that can be used for short-term rentals.
Many cities also require homeowners to obtain a license or permit before renting out their properties. Nick Del Pego, CEO at Deckard Technologies, explains:
“Renting short-term rentals is considered a business by most local governments, and owners must comply with specific workplace regulations and business licensing rules established in their local communities.”
It is important to thoroughly check whether short-term rentals are regulated or prohibited by the local government and your homeowners association (HOA) before even considering renting out your home.
Converting your home into a short-term rental isn’t a decision you should make without doing your research. To decide if selling your house is a better alternative, talk with a local real estate agent today.
Source: KCM
If you’re in the process of looking for a home today, you know the supply of homes for sale is low because you’re feeling the impact of having a limited pool of options. And, if your biggest hurdle right now is that you’re having trouble finding something you like, don’t forget that a newly built home is a great option.
As a recent article from the National Association of Realtors (NAR) says:
“Home buyers continue to be met with limited housing options during what’s typically the real estate market’s busiest season. . . . The current supply of existing homes is about half the level it was in 2019 . . . Meanwhile, the market for new construction is a bright spot.”
Here’s a look at a key metric that shows just how much new home construction is ramping up nationwide. It’s called new residential completions. Basically, completions are newly built homes that are finished and ready to move into.
The graph below uses data from the Census to show the trend of new-home completions over time, including the long-term average for the number of finished housing units (shown in black on the graph):
As you can see on the left (shown in orange), leading up to the housing crash, builders exceeded that average. The result was an oversupply of homes on the market, so home values declined. That was one of the factors that led to the housing crash back in 2008.
Since then, the level of new home construction has fallen off, and builders haven’t built enough homes to meet the historical average (shown in red). That underbuilding left the housing market with a multi-year inventory deficit. And, that deficit is part of what makes inventory so low right now.
But, here’s the good news. The green on the right shows that according to the latest report from the Census, builders are matching the long-term average right now. And that means they’re bringing more newly built homes to the market than they have in recent memory.
And residential starts and permits are also gaining momentum. Starts are homes where the construction has officially kicked off. Permits are homes where builders are planning to break ground soon. Since both are up, it’s a sign there are even more newly built homes coming soon.
More newly built homes in various stages of the construction process means your pool of options just got bigger. If you’re looking to move right now and timing is important to you, reach out to a local real estate professional to explore the homes that were recently completed in your area. If construction is done on those homes, you should be able to move in quickly.
But, if you can wait a bit and the idea of customizing a home from the ground up appeals to you, ask that same agent about the homes in your area that are in the process of being built. If you buy a home that’s still in the works, you can help pick the features and finishings along the way. And when none of the homes you’ve looked at so far are to your liking, being able to tailor one to your taste may be your best option.
Either way, a trusted real estate agent is a crucial part of the process. They’ll know exactly what’s available in your area and can base their recommendations on your unique needs, desired neighborhoods, and more.
So, if you’re having trouble finding a home you like while inventory is so low, it may be time to consider looking into new-home construction. If you’d like to start that conversation, reach out to a trusted local real estate professional who’s an expert on what’s available in your area.
Source: KCM
When it comes to selling your house, you want three things: to sell it for the most money you can, to do it in a certain amount of time, and to do all of that with the fewest hassles. And, while the current housing market is generally favorable to sellers due to today’s limited housing supply, there are still factors that can cause delays or even prevent a house from selling.
If you’re having trouble getting your house to sell in today’s sellers’ market, here are a few things to think about.
One of the biggest mistakes you can make as a seller is limiting the days and times when buyers can view your home. In any market, if you want to maximize the sale of your house, you can’t limit potential buyers’ ability to view it. Remember, minimal access equals minimal exposure.
In some cases, some of the most motivated buyers may come from outside of your local area. Because they’re traveling, they might not have the luxury to adjust their schedules when faced with limited options to tour your house, so make it available as much as possible.
Pricing is a critical factor that can significantly impact your home sale. While it’s tempting to push the price higher to try to maximize your profit, overpricing can deter potential buyers and lead to your home sitting on the market longer.
Jeff Tucker, Senior Economist at Zillow, notes:
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
Not to mention, buyers today have access to a number of tools and resources to view available homes in your area. If your house is priced unreasonably high compared to similar homes, it may drive potential buyers away. Listen to the feedback your agent is getting at open houses and showings. If the feedback is consistent, it may be time to re-evaluate and potentially lower the price.
When selling your house, the old saying “you never get a second chance to make a first impression” matters. Putting in the work on the exterior of your home is just as important as what you stage inside. Freshen up your landscaping to improve your home’s curb appeal so you can make an impact upfront. As an article from Investopedia says:
“Curb-appeal projects make the property look good as soon as prospective buyers arrive. While these projects may not add a considerable amount of monetary value, they will help your home sell faster—and you can do a lot of the work yourself to save money and time.”
But don’t let that stop at the front door. By removing personal items and reducing clutter inside, you give buyers more freedom to picture themselves in the home. Additionally, a new coat of paint or cleaning the floors can go a long way to freshening up a room.
For all of these things, lean on your real estate agent for expert advice based on your unique situation and feedback you get from buyers throughout the process.
If your house isn’t getting the attention you feel it deserves and isn’t selling in the timeframe you wanted, it’s time to ask your trusted real estate agent for advice on what you may need to revisit or change in your approach. To get those expert insights, connect with a real estate professional.
Source: KCM
![The Benefits of Downsizing for Homeowners [INFOGRAPHIC] Simplifying The Market](https://files.keepingcurrentmatters.com/content/images/20230706/The-Benefits-of-Downsizing-for-Homeowners-KCM-Share.png)
Source: KCM
One of the biggest challenges in the housing market right now is how few homes there are for sale compared to the number of people who want to buy them. To help emphasize just how limited housing inventory still is, let’s take a look at the latest information on active listings, or homes for sale in a given month, as it compares to more normal levels.
According to a recent report from Realtor.com:
“On average, active inventory in June was 50.6% below pre-pandemic 2017–2019 levels.”
The graph below helps illustrate this point. It uses historical data to provide a more concrete look at how much the numbers are still lagging behind the level of inventory typical of a more normal market (see graph below):
It’s worth noting that 2020-2022 are not included in this graph. That’s because they were truly abnormal years for the housing market. To make the comparison fair, those have been omitted so they don’t distort the data.
When you compare the orange bars for 2023 with the last normal years for the housing market (2017-2019), you can see the count of active listings is still far below the norm.
If you’re thinking about selling your house, that low inventory is why this is a great time to do so. Buyers have fewer choices now than they did in more normal years, and that’s continuing to impact some key statistics in the housing market. For example, sellers will be happy to see the following data from the latest Confidence Index from the National Association of Realtors (NAR):
When supply is so low, your house is going to be in the spotlight. That’s why sellers are seeing their homes sell a little faster and get more offers right now. If you’ve thought about selling, now’s the time to make a move. Connect with a trusted real estate professional to get the process started.
Source: KCM
If you’re thinking of buying a home, chances are you’re paying attention to just about everything you hear about the housing market. And you’re getting your information from a variety of channels: the news, social media, your real estate agent, conversations with friends and loved ones, overhearing someone chatting at the local supermarket, the list goes on and on. Most likely, home prices and mortgage rates are coming up a lot.
To help cut through the noise and give you the information you need most, take a look at what the data says. Here are the top two questions you need to ask yourself about home prices and mortgage rates as you make your decision:
One reliable place you can turn to for that information is the Home Price Expectation Survey from Pulsenomics – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists.
According to the latest release, the experts surveyed are projecting slight depreciation this year (see the red in the graph below). But here’s the context you need most. The worst home price declines are already behind us, and prices are actually appreciating again in many markets. Not to mention, the small 0.37% depreciation HPES is showing for 2023 is far from the crash some people originally said would happen.
Now, let’s look to the future. The green in the graph below shows prices have turned a corner and are expected to appreciate in 2024 and beyond. After this year, the HPES is forecasting home price appreciation returning to more normal levels for the next several years.
So, why does this matter to you? It means your home will likely grow in value and you should gain home equity in the years ahead, but only if you buy now. If you wait, based on these forecasts, the home will only cost you more later on.
Over the past year, mortgage rates have risen in response to economic uncertainty, inflation, and more. We know based on the latest reports that inflation, while still high, has moderated from its peak. This is an encouraging sign for the market and for mortgage rates. Here’s why.
When inflation cools, mortgage rates generally fall in response. This may be why some experts are saying mortgage rates will pull back slightly over the next few quarters and settle somewhere around roughly 5.5 and 6% on average.
But, not even the experts can say with absolute certainty where mortgage rates will be next year, or even next month. That’s because there are so many factors that can impact what happens. So, to give you a lens into the various possible outcomes, here’s what you should consider:
If you’re thinking about buying a home, you need to know what’s expected with home prices and mortgage rates. While no one can say for certain where they’ll go, expert projections can give you powerful information to keep you informed. Lean on a trusted real estate professional who can add in an expert opinion on your local market.
Source: KCM
Everyone’s interpretation of the American Dream is unique and personal. But, for many people, it’s tied to a sense of success, freedom, and prosperity. These are all things that owning a home can help provide.
A recent survey from Bankrate asked respondents which achievements they feel most embody the American Dream. The responses prove owning a home is still important to so many Americans today (see graph below):
As the graph shows, homeownership ranks above other significant milestones, including retirement, having a successful career, and earning a college degree.
A recent report from MYND helps shed light on why so many people value homeownership. It finds:
“. . . nearly two-thirds of Americans (65%) see homeownership as a means of building intergenerational wealth.”
That’s because, when you own a home, your equity (and net worth) grows over time as you pay down your home loan and as home prices appreciate. This can be a key factor in building intergenerational wealth and long-term financial stability.
To further drive home the difference homeownership can make in your life, a report from Fannie Mae says:
“Most consumers (87%) believe owning a home is important to ‘live the good life.’ . . . Notably, significantly more see ‘having less stress’ as a benefit achieved by owning than renting.”
Especially today, this could be because, when you own a home with a fixed-rate mortgage, you stabilize what’s likely your largest monthly expense (your housing cost), and that helps combat the impact of rising costs from inflation.
While it may feel challenging to buy a home today with higher mortgage rates and home prices, if the time is right for you, know that when you buy a home, incredible benefits are waiting for you at the end of your journey.
Buying a home is a significant and powerful choice, embodying the foundation of the American Dream. If you plan to make your homeownership dream a reality this year, take the first step by reaching out to a local real estate expert and start the process today.
Source: KCM
When it comes to buying a home, especially with today’s affordability challenges, you’ll want to be strategic. Mortgage rates impact how much it costs to borrow money for your home loan. And, to help offset the higher borrowing costs today, some homebuyers are taking a close look at their wish list and re-evaluating what features they really need in their next home to avoid overextending. As a recent NerdWallet article says:
“A pool, for example, may be nice to have, but it may not provide as much day-to-day value as a garage or a space for a home office . . .”
While that pool may be appealing, think twice on whether or not it’s really something you must have to be happy in your next home. Is getting that pool the main reason you’re moving? Probably not. It’s more likely a need for more space, a home office, or proximity to loved ones, friends, or work that’s motivating you to make a change.
So, if you’re looking to buy a home, take some time to consider what’s truly essential for you in your next house. Make a list of all the features you’ll want to see, and from there, work to break those features into categories. Here’s a great way to organize your list:
Once you’ve categorized it in a way that works for you, discuss your top priorities with your real estate agent. Remember to think carefully about what’s a non-negotiable for your lifestyle and what’s a nice-to-have that’s more of an added bonus. Be sure to discuss where each feature falls with your agent. They’ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your top needs.
Putting together your list of necessary features for your next home might seem like a small task, but it’s a crucial planning step on your homebuying journey today. If you’re ready to find a home that fits your needs, connect with a local real estate advisor.
Source: KCM
