Category Archives: Housing Market Updates

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A Key Opportunity for Homebuyers

A Key Opportunity for Homebuyers | Simplifying The Market

There’s no denying the housing market has delivered a fair share of challenges to homebuyers over the past two years. Two of the biggest hurdles homebuyers faced during the pandemic were the limited number of homes for sale and the intensity and frequency of bidding wars. But those two things have reached a turning point.

As you may have already heard, the number of homes for sale has increased this year, and even more so this spring. As Danielle Hale, Chief Economist for realtor.com, explains:

New listings–a measure of sellers putting homes up for sale–were up 6% above one year ago. Home sellers in many markets across the country continue to benefit from rising home prices and fast-selling homes. That’s prompted a growing number of homeowners to sell homes this year compared to last, giving home shoppers much needed options.”

This is encouraging news. More homes coming onto the market give you a greater chance of finding one that checks all your boxes.

Buyer Competition Moderating Helps Inventory Grow Even More

Mark Fleming, Chief Economist at First American, says inventory growth is happening not just because there’s an increase in the number of listings coming onto the market, but also because buyer demand has moderated some in light of higher mortgage rates and other economic factors:

There has been a pickup in the inventory that we’ve seen recently, but it’s not from a big increase in new listings . . . but rather a slowdown in the pace of sales. And remember that months’ supply measures the inventory of sale relative to the pace of sales. Same inventory, fewer sales, means more months’ supply.”

Basically, the market is shifting away from the frenzy of buyer competition seen during the pandemic, and that’s helping available inventory grow. In their latest forecast, realtor.com also mentions the moderation of demand as a key factor and projects the inventory growth should continue:

As rising inflation and mortgage rates bring U.S. housing demand back from the 2021 frenzy, . . . inventory will grow double-digits over 2021 and offer buyers a better-than-expected chance to find a home.”

How This Impacts You

The combination of more homes coming onto the market and a slower pace of home sales means you’ll have more options to choose from as you search for your next home. That’s great news if you’ve been searching for a while with little to no luck. Just remember, there isn’t a sudden surplus of inventory, just more homes to choose from than even a few months ago. So, you’ll still want to be decisive and move fast when you find the right home for you.

And when you do, you may be faced with less competition from other buyers too. If you’ve been waiting to jump into the market because the intensity of the bidding wars was intimidating or if you’ve been outbid on several homes, this moderation could help make the homebuying process a bit smoother. It’s not that it’ll be easy or that bidding wars are a thing of the past – that’s not the case. But it won’t feel nearly as impossible.

Bottom Line

As the housing market begins its shift back toward pre-pandemic levels, you could have a unique opportunity in front of you. With moderating levels of buyer competition and more homes actively for sale, your home search may have gotten a bit less challenging. Let’s connect to begin the process today.

Content previously posted on Keeping Current Matters

Two Reasons Why Today’s Housing Market Isn’t a Bubble

Two Reasons Why Today’s Housing Market Isn’t a Bubble | Simplifying The Market

You may be reading headlines and hearing talk about a potential housing bubble or a crash, but it’s important to understand that the data and expert opinions tell a different story. A recent survey from Pulsenomics asked over one hundred housing market experts and real estate economists if they believe the housing market is in a bubble. The results indicate most experts don’t think that’s the case (see graph below):

Two Reasons Why Today’s Housing Market Isn’t a Bubble | Simplifying The MarketAs the graph shows, a strong majority (60%) said the real estate market is not currently in a bubble. In the same survey, experts give the following reasons why this isn’t like 2008:

  • The recent growth in home prices is because of demographics and low inventory
  • Credit risks are low because underwriting and lending standards are sound

If you’re concerned a crash may be coming, here’s a deep dive into those two key factors that should help ease your concerns.

1. Low Housing Inventory Is Causing Home Prices To Rise

The supply of homes available for sale needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation.

As the graph below shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and foreclosures), and that caused prices to tumble. Today, there’s still a shortage of inventory, which is causing ongoing home price appreciation (see graph below):

Two Reasons Why Today’s Housing Market Isn’t a Bubble | Simplifying The MarketInventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a limited supply of homes for sale. Odeta Kushi, Deputy Chief Economist at First American, explains:

“The fundamentals driving house price growth in the U.S. remain intact. . . . The demand for homes continues to exceed the supply of homes for sale, which is keeping house price growth high.”

2. Mortgage Lending Standards Today Are Nothing Like the Last Time

During the housing bubble, it was much easier to get a mortgage than it is today. Here’s a graph showing the mortgage volume issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the years after:

Two Reasons Why Today’s Housing Market Isn’t a Bubble | Simplifying The MarketThis graph helps show one element of why mortgage standards are nothing like they were the last time. Purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash. Realtor.com notes:

. . . Lenders are giving mortgages only to the most qualified borrowers. These buyers are less likely to wind up in foreclosure.”

Bottom Line

A majority of experts agree we’re not in a housing bubble. That’s because home price growth is backed by strong housing market fundamentals and lending standards are much tighter today. If you have questions, let’s connect to discuss why today’s housing market is nothing like 2008.

Content previously posted on Keeping Current Matters

The Average Homeowner Gained $64K in Equity over the Past Year

The Average Homeowner Gained $64K in Equity over the Past Year | Simplifying The Market

If you own a home, your net worth likely just got a big boost thanks to rising home equity. Equity is the current value of your home minus what you owe on the loan. And today, based on recent home price appreciation, you’re building that equity far faster than you may expect – here’s how it works.

Because there’s an ongoing imbalance between the number of homes available for sale and the number of buyers looking to make a purchase, home prices are on the rise. That means your home is worth more in today’s market because it’s in high demand. As Patrick Dodd, President and CEO of CoreLogic, explains:

“Price growth is the key ingredient for the creation of home equity wealth. . . . This has led to the largest one-year gain in average home equity wealth for owners. . . .”

Basically, because your home value has likely climbed so much, your equity has increased too. According to the latest Homeowner Equity Insights from CoreLogic, the average homeowner’s equity has grown by $64,000 over the last 12 months.

While that’s the nationwide number, if you want to know what’s happening in your area, look at the map below. It breaks down the average year-over-year equity growth for each state using the data from CoreLogic.

The Average Homeowner Gained $64K in Equity over the Past Year | Simplifying The Market

The Opportunity Your Rising Home Equity Provides

In addition to building your overall net worth, equity can also help you achieve other goals like buying your next home. When you sell your current house, the equity you built up comes back to you in the sale. In a market where homeowners are gaining so much equity, it may be just what you need to cover a large portion – if not all – of the down payment on your next home.

So, if you’ve been holding off on selling or you’re worried about being priced out of your next home because of today’s ongoing home price appreciation, rest assured your equity can help fuel your move.

Bottom Line

If you’re planning to make a move, the equity you’ve gained can make a big impact. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, let’s connect so you can get a professional equity assessment report on your house.

Content previously posted on Keeping Current Matters

Why Achieving the Dream of Homeownership Can Be More Difficult for Some Americans

Why Achieving the Dream of Homeownership Can Be More Difficult for Some Americans | Simplifying The Market

Today we take time to honor and recognize the past and present experiences of Black Americans. When it comes to real estate specifically, equitable access to housing has come a long way, but the path to homeownership is still steeper for households of color.

The Gap in Homeownership Rate in America

It’s a more challenging journey to achieve homeownership for some buyers, as shown by the measurable gap between the overall average U.S. homeownership rate and that of non-white groups. Today, Census data shows the lowest homeownership rate persists in the Black community (see graph below):

Why Achieving the Dream of Homeownership Can Be More Difficult for Some Americans | Simplifying The Market

This graph clearly indicates there’s a gap that still exists in the percentage of people in each community who are able to achieve homeownership. 

How Homeownership Impacts Household Wealth 

One of the challenges that could make buying a home harder for these groups is how difficult it can be to accumulate wealth. Even today, there are obstacles certain racial and ethnic groups, especially the Black community, still face. A recent article from NextAdvisor explains:

“The median Black household earns 61 cents for every dollar earned by a comparable White household, according to the Economic Policy Institute. This not only makes it more difficult to afford a home, but also to accumulate and pass on generational wealth.”

This can delay or prevent many from achieving homeownership, challenging their ability to grow their net worth and build wealth that can pass down to future generations – a point that’s clear in a 2022 report from the National Association of Realtors (NAR):

Given that homeownership contributes to wealth accumulation and the homeownership rate is lower in minority groups, data shows that the net worth for these groups is also lower. At $188,200, the net worth of a typical white family was nearly 8 times greater than that of a Black family ($24,100) in 2019.”

It’s important to talk about the experience Black homebuyers may have and the challenges they may face as they pursue their dream of homeownership. The inequity that remains in housing can be a point of pain and frustration. That’s why it’s so important for members of diverse groups to have the right team of experts on their sides throughout the homebuying process.

These professionals aren’t only experienced advisors who understand the market and give the best advice. They’re also compassionate allies who will advocate for your best interests every step of the way. They can point you to important resources and tools that can help you throughout your journey to homeownership.

Bottom Line

Opportunities in real estate improve every day, but there are still equity challenges that many face. Let’s connect to make sure you have an advocate on your side to help you achieve your dream of homeownership.

Content previously posted on Keeping Current Matters

More Listings Are Coming onto the Market [INFOGRAPHIC]

More Listings Are Coming onto the Market [INFOGRAPHIC] | Simplifying The Market

More Listings Are Coming onto the Market [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • Worried you won’t be able to find your next home after you sell? You should know data from realtor.com shows more listings are coming onto the market each month this year.
  • Having additional options can make the search for your next home easier. But inventory is still low overall, which means your house should still stand out when you sell.
  • If your biggest question is where you’ll go if you sell, take this as encouraging news. Let’s connect to start the process today.

Content previously posted on Keeping Current Matters

Home Price Deceleration Doesn’t Mean Home Price Depreciation

Home Price Deceleration Doesn’t Mean Home Price Depreciation | Simplifying The Market

Experts in the real estate industry use a number of terms when they talk about what’s happening with home prices. And some of those words sound a bit similar but mean very different things. To help clarify what’s happening with home prices and where experts say they’re going, here’s a look at a few terms you may hear:

  • Appreciation is when home prices increase.
  • Depreciation is when home prices decrease.
  • Deceleration is when home prices continue to appreciate, but at a slower pace.

Where Home Prices Have Been in Recent Years

For starters, you’ve probably heard home prices have skyrocketed over the past two years, but homes were actually appreciating long before that. You might be surprised to learn that home prices have climbed for 122 consecutive months (see graph below):

Home Price Deceleration Doesn’t Mean Home Price Depreciation | Simplifying The Market

As the graph shows, houses have gained value consistently over the past 10 consecutive years. But since 2020, the increase has been more dramatic as home price growth accelerated.

So why did home prices climb so much? It’s because there were more buyers than there were homes for sale. That imbalance put upward pressure on home prices because demand was high and supply was low.

Where Experts Say Home Prices Are Going

While this is helpful context, if you’re a buyer or seller in today’s market, you probably want to know what’s going to happen with home prices moving forward. Will they continue that same growth path or will home prices fall?

Experts are forecasting ongoing appreciation, just at a decelerated pace. In other words, prices will keep climbing, just not as fast as they have been. The graph below shows home price forecasts from seven industry leaders. None are calling for prices to fall (see graph below):

Home Price Deceleration Doesn’t Mean Home Price Depreciation | Simplifying The Market

Mark Fleming, Chief Economist at First American, identifies a key reason why home prices won’t depreciate or drop:

In today’s housing market, demand for homes continues to outpace supply, which is keeping the pressure on house prices, so don’t expect house prices to decline.”

And although housing supply is starting to tick up, it’s not enough to make home prices decline because there’s still a gap between the number of homes available for sale and the volume of buyers looking to make a purchase.

Terry Loebs, Founder of the research firm Pulsenomics, notes that most real estate experts and economists anticipate home prices will continue rising. As he puts it:

“With home values at record-high levels and a vast majority of experts projecting additional price increases this year and beyond, home prices and expectations remain buoyant.”

Bottom Line

Experts forecast price deceleration, not depreciation. That means home prices will continue to rise, just at a slower pace. Let’s connect so you can get the full picture of what’s happening with home prices in our local market and to discuss your buying and selling goals.

Content previously posted on Keeping Current Matters

Is the Housing Market Correcting?

Is the Housing Market Correcting? | Simplifying The Market

If you’re following the news, all of the headlines about conditions in the current housing market may leave you with more questions than answers. Is the boom over? Is the market crashing or correcting? Here’s what you need to know.

The housing market is moderating compared to the last two years, but what everyone needs to remember is that the past two years were record-breaking in nearly every way. Record-low mortgage rates and millennials reaching peak homebuying years led to an influx of buyer demand. At the same time, there weren’t enough homes available to purchase thanks to many years of underbuilding and sellers who held off on listing their homes due to the health crisis.

This combination led to record-high demand and record-low supply, and that wasn’t going to be sustainable for the long term. The latest data shows early signs of a shift back to the market pace seen in the years leading up to the pandemic – not a crash nor a correction. As realtor.com says:

The housing market is at a turning point. . . . We’re starting to see signs of a new direction, . . .”

Home Showings Then and Now

The ShowingTime Showing Index tracks the traffic of home showings according to agents and brokers. It’s a good indication of buyer demand. Here’s a look at that data going back to 2019 (see graph below):

Is the Housing Market Correcting? | Simplifying The Market

The 2019 numbers give a good baseline of pre-pandemic demand (shown in gray). As the graph indicates, home showings skyrocketed during the pandemic (shown in blue). And while current buyer demand has begun to moderate slightly based on the latest data (shown in green), showings are still above 2019 levels.

And since 2019 was such a strong year for the housing market, this helps show that the market isn’t crashing – it’s just at a turning point that’s moving back toward more pre-pandemic levels.

Existing Home Sales Then and Now

Headlines are also talking about how existing home sales are declining, but perspective matters. Here’s a look at existing home sales going all the way back to 2019 using data from the National Association of Realtors (NAR) (see graph below):

Is the Housing Market Correcting? | Simplifying The Market

Again, a similar story emerges. The pandemic numbers (shown in blue) beat the more typical year of 2019 home sales (shown in gray). And according to the latest projections for 2022 (shown in green), the market is on pace to close this year with more home sales than 2019 as well.

It’s important to compare today not to the abnormal pandemic years, but to the most recent normal year to show the current housing market is still strong. First American sums it up like this:

“. . . today’s housing market looks a lot like the 2019 housing market, which was the strongest housing market in a decade at the time.”

Bottom Line

If recent headlines are generating any concerns, look at a more typical year for perspective. The current market is not a crash or correction. It’s just a turning point toward more typical, pre-pandemic levels. Let’s connect if you have any questions about our local market and what it means for you when you buy or sell this year.

Content previously posted on Keeping Current Matters

More Americans Choose Real Estate as the Best Investment Than Ever Before

More Americans Choose Real Estate as the Best Investment Than Ever Before | Simplifying The Market

Americans’ opinion on the value of real estate as an investment is climbing. That’s according to an annual survey from Gallup. Not only is real estate viewed as the best investment for the ninth year in a row, but more Americans selected it than ever before.

The graph below shows the results of the survey since Gallup began asking the question in 2011. As the trend lines indicate, real estate has been gaining ground as the clear favorite for almost a decade now:

More Americans Choose Real Estate as the Best Investment Than Ever Before | Simplifying The Market

If you’re thinking about purchasing a home, let this poll reassure you. Even when inflation is high like today, Americans recognize owning a home is a powerful financial decision.

How an Investment in Real Estate Can Benefit You During High Inflation

Because inflation reached its highest level in 40 years recently, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board, and that includes goods, services, housing costs, and more. When you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increases on one of your biggest budgetary items each month.

If you’re a renter, you don’t have that same benefit, and you aren’t protected from these increases, especially as rents rise. As Danielle Hale, Chief Economist at realtor.com, notes:

“Rising rents, which continue to climb at double-digit pace . . . and the prospect of locking in a monthly housing cost in a market with widespread inflation are motivating today’s first-time homebuyers.”

When Inflation Has Risen in the Past, Home Prices Have Too

Your house is also an asset that typically increases in value over time, even during inflation. That‘s because as prices rise, the value of your home does too. Mark Cussen, Financial Writer for Investopedia, puts it like this:

“There are many advantages to investing in real estate. . . . It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because as inflation rises, so do property values. . . .”

And since rising home values help increase your equity, and by extension your net worth, homeownership is historically a good hedge against inflation.

Bottom Line

Buying a home is a powerful decision. It’s no wonder why so many people view it as the best long-term investment, even when inflation is high. When you buy, you help shield yourself from increases in your housing costs and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.

Content previously posted on Keeping Current Matters

Why the Growing Number of Homes for Sale Is Good for Your Move Up

Why the Growing Number of Homes for Sale Is Good for Your Move Up | Simplifying The Market

Are you thinking about selling your current home? If so, the biggest question on your mind may be: if I sell now, where will I go? If this resonates with you, there’s something you should know. The number of homes coming onto the market is increasing and that could make it easier for you to move up this summer.

According to the latest data from realtor.com, the number of homes being listed for sale, known as new listings, has increased consistently this year (see graph below):

Why the Growing Number of Homes for Sale Is Good for Your Move Up | Simplifying The Market

While this news has clear benefits for buyers who are craving more options for their home search, what does that mean for current homeowners like you? It gives you two distinct opportunities in today’s housing market.

Opportunity #1: Take Advantage of More Options for Your Move Up

If your current house no longer meets your needs or lacks the space and features you want, this gives you even more opportunity to sell and move up into the home of your dreams. As more options come to market, you’ll have more to choose from when you search for your next home.

Partnering with a local real estate professional can help make sure you see these listings as soon as they come onto the market. And when you do find the one, that professional can advise you on how to write a winning offer to seal the deal.

Opportunity #2: Sell Before You Have More Competition

Just know that, in order to make sure your house shines above the rest, it may make sense to put your home up for sale before your neighbors do the same, creating more competition in your area. The increase in the number of homes being listed for sale is expected to continue, and a recent study from realtor.com says two-thirds of homeowners looking to sell say they’ll do so by August.

A real estate professional can advise you on what you need to tackle to get your house ready to list so they can put that for sale sign up in your yard sooner rather than later. That’s because the process of getting a home ready to sell isn’t taking as long as you may think. As a result, you can capitalize on today’s sellers’ market and get ahead of the competition.

Bottom Line

If you’re a current homeowner looking to sell, let’s connect to begin the process. You have a unique opportunity to benefit from the additional homes being listed today and sell before your house has more competition.

Content previously posted on Keeping Current Matters

History Proves Recession Doesn’t Equal a Housing Crisis [INFOGRAPHIC]

History Proves Recession Doesn’t Equal a Housing Crisis [INFOGRAPHIC] | Simplifying The Market

History Proves Recession Doesn’t Equal a Housing Crisis [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • It’s important to understand history proves an economic slowdown does not equal a housing crisis.
  • In 4 of the last 6 recessions, home prices actually appreciated. Home prices only fell twice – minimally in the early 90s and then by nearly 20% during the housing crash in 2008.
  • If you have questions, let’s connect to discuss why today’s housing market is nothing like 2008.

Content previously posted on Keeping Current Matters