What’s Going on with Home Prices? Ask a Professional.

What’s Going on with Home Prices? Ask a Professional. | Simplifying The Market

If you’re thinking about buying or selling a home this year, you may have questions about what’s happening with home prices today as the market cools. In the simplest sense, nationally, experts don’t expect prices to come crashing down, but the level of home price moderation will depend on factors like supply and demand in each local market.

That means, moving forward, home price appreciation will continue to vary by location, with more significant changes happening in overheated areas. Here’s a quick snapshot of what the experts are saying:

Danielle Hale, Chief Economist at realtor.com, says:

“The major question on the minds of homeowners and aspiring buyers alike is what will happen to home prices. . . Soaring prices were propelled by all-time low mortgage rates which are a thing of the past. As a result, home price growth is expected to continue slowing, dipping below its pre-pandemic average to 5.4% for 2023, as a whole.

Mark Fleming, Chief Economist at First American, says:

“House price appreciation has slowed in all 50 markets we track, but the deceleration is generally more dramatic in areas that experienced the strongest peak appreciation rates.”

Taylor Marr, Deputy Chief Economist at Redfin, says:

“For those bearish folks eagerly awaiting the home price crash, you’ll have to keep waiting. As much as demand is pulling back supply is as well reducing downward pressure on prices in the short run.”

John Paulson, Founder of Paulson & Co., says:

“It’s true – housing may be a little frothy. So housing prices may come down or they may plateau . . .”

What Does This Mean for You?

The best way to get the answers you need is to lean on a local real estate advisor. They’ll be able to explain the latest trends in your specific market so you can make a confident and informed decision on your next step toward buying or selling a home.

Bottom Line

If you have questions about what’s happening with home prices today, let’s connect so you have the latest on our local market.

Content previously posted on Keeping Current Matters

Winter Home Selling Checklist [INFOGRAPHIC]

Winter Home Selling Checklist [INFOGRAPHIC] | Simplifying The Market

Winter Home Selling Checklist [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • As you get ready to sell your house, focus on tasks that make it inviting, show it’s cared for, and boost your curb appeal.
  • This list will help you get started, but don’t forget, a real estate professional will provide other helpful tips based on your specific situation.
  • Let’s connect so you have advice on what you may want to do to get your house ready to sell this season.
Content previously posted on Keeping Current Matters

Why There Won’t Be a Flood of Foreclosures Coming to the Housing Market

Why There Won’t Be a Flood of Foreclosures Coming to the Housing Market | Simplifying The Market

With the rapid shift that’s happened in the housing market this year, some people are raising concerns that we’re destined for a repeat of the crash we saw in 2008. But in truth, there are many key differences between what’s happening today and the bubble in the early 2000s.

One of the reasons this isn’t like the last time is the number of foreclosures in the market is much lower now. Here’s a look at why there won’t be a wave of foreclosures flooding the market.

Not as Many Homeowners Are in Trouble This Time

After the last housing crash, over nine million households lost their homes due to a foreclosure, short sale, or because they gave it back to the bank. This was, in large part, because of more relaxed lending standards where people could take out mortgages they ultimately couldn’t afford. Those lending practices led to a wave of distressed properties which made their way into the market and caused home values to plummet.

But today, revised lending standards have led to more qualified buyers. As a result, there are fewer homeowners who are behind on their mortgages. As Marina Walsh, Vice President of Industry Analysis at the Mortgage Bankers Association (MBA), says:

For the second quarter in a row, the mortgage delinquency rate fell to its lowest level since MBA’s survey began in 1979 – declining to 3.45%. Foreclosure starts and loans in the process of foreclosure also dropped in the third quarter to levels further below their historical averages.”

There Have Been Fewer Foreclosures over the Last Two Years

While you may have seen recent stories about the number of foreclosures rising today, context is important. During the pandemic, many homeowners were able to pause their mortgage payments using the forbearance program. The program gave homeowners facing difficulties extra time to get their finances in order and, in many cases, work out a plan with their lender.

With that program, many were concerned it would result in a wave of foreclosures coming to the market. That fear didn’t materialize. Data from the New York Fed shows there are still fewer foreclosures happening today than before the pandemic (see graph below):

Why There Won’t Be a Flood of Foreclosures Coming to the Housing Market | Simplifying The Market

That means, while there are more foreclosures now compared to last year (when foreclosures were paused), the number is still well below what the housing market has seen in a more typical year, like 2017-2019.

And most importantly, the number we’re seeing now is still far below the number we saw during the market crash (shown in the red bars in the graph). The big takeaway? Don’t let a headline in the news mislead you. While foreclosures are up year-over-year, historical context is essential to understanding the full picture.

Most Homeowners Have More Than Enough Equity To Sell Their Homes

Many homeowners today have enough equity to sell their homes instead of facing foreclosure. Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home. And if they’ve stayed in their homes even longer, they may have even more equity than they realize. As Ksenia Potapov, Economist at First American, says:

Homeowners have very high levels of tappable home equity today, providing a cushion to withstand potential price declines, but also preventing housing distress from turning into a foreclosure. . . the result will likely be more of a foreclosure ‘trickle’ than a ‘tsunami.’”

A recent report from ATTOM Data explains it by going even deeper into the numbers:

“Only about 214,800 homeowners were facing possible foreclosure in the second quarter of 2022, or just four-tenths of one percent of the 58.2 million outstanding mortgages in the U.S. Of those facing foreclosure, about 195,400, or 91 percent, had at least some equity built up in their homes.”

Bottom Line

If you see headlines about the increasing number of foreclosures today, remember context is important. While it’s true the number of foreclosures is higher now than it was last year, foreclosures are still well below pre-pandemic years. If you have questions, let’s connect.

Content previously posted on Keeping Current Matters

3 Ways You Can Use Your Home Equity

3 Ways You Can Use Your Home Equity | Simplifying The Market

If you’re a homeowner, odds are your equity has grown significantly over the last few years as home prices skyrocketed and you made your monthly mortgage payments. Home equity builds over time and can help you achieve certain goals. According to the latest Equity Insights Report from CoreLogic, the average borrower with a home loan has almost $300,000 in equity right now.

As you weigh your options, especially in the face of inflation and talk of a recession, it’s important to understand your assets and how you can leverage them. A real estate professional is the best resource to help you understand how much home equity you have and advise you on some of the ways you can use it.  Here are a few examples.

1. Buy a Home That Fits Your Needs

 If you no longer have the space you need, it might be time to move into a larger home. Or it’s possible you have too much space and need something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle. 

If you want to upgrade your house, you can put your equity toward a down payment on the home of your dreams. And if you’re planning to downsize, you may be surprised that your equity may cover some, if not all, of the cost of your next home. A real estate advisor can help you figure out how much equity you have and how you can use it toward the purchase of your next home.

2. Reinvest in Your Current House

According to a recent survey from Point, 39% of homeowners would invest in home improvement projects if they chose to access their equity. This is a great option if you want to change some things about your living space but you aren’t ready to make a move just yet.

Home improvement projects allow you to customize your home to suit your needs and sense of style. Just remember to think ahead with any updates you make, as some renovations add more value to your home and are more likely to appeal to future buyers than others. For example, a report from the National Association of Realtors (NAR) shows refinishing or replacing wood flooring has a high cost recovery. Lean on a local professional for the best advice on which projects to invest in to get the greatest return on your investment when you sell.

3. Pursue Your Personal Goals

In addition to making a move or updating your house, home equity can also help you achieve the life goals you’ve dreamed of. That could mean investing in a new business venture, retiring or downsizing, or funding an education. While you shouldn’t use your equity for unnecessary spending, leveraging it to start a business or putting it toward education costs can help you achieve other lifelong goals.

Bottom Line

Your equity can be a game changer. If you’re unsure how much equity you have in your home, let’s connect so you can start planning your next move.

Content previously posted on Keeping Current Matters

Your House Could Be the #1 Item on a Homebuyer’s Wish List During the Holidays

Your House Could Be the #1 Item on a Homebuyer’s Wish List During the Holidays | Simplifying The Market

Each year, homeowners planning to make a move are faced with a decision: sell their house during the holidays or wait. And others who have already listed their homes may think about removing their listings and waiting until the new year to go back on the market.

The truth is many buyers want to purchase a home for the holidays, and your house might be just what they’re looking for. Here are five great reasons you shouldn’t wait to sell your house.

1. While the supply of homes for sale has increased this year, there still aren’t enough homes on the market to keep up with buyer demand. As Nadia Evangelou, Senior Economist & Director of Forecasting at the National Association of Realtors (NAR), explains:

“There’s still this gap between demand and supply because we were underbuilding for many years. . . . So now we see demand is slowing, but it still outpaces supply.”

2. Serious homebuyers are out looking right now. Millennials are driving homebuying demand today, and many are eager to make a purchase. Mark Fleming, Chief Economist at First American, explains:

“While not the frenzy of 2021, the largest living generation, the Millennials, will continue to age into their prime home-buying years, creating a demographic tailwind for the housing market.”

3. The desire to own a home doesn’t stop during the holidays. In fact, homes decorated for the holidays appeal to many buyers. Plus, purchasers who look for homes during the holidays are ready to buy.

4. You can restrict the showings in your house to days and times that are most convenient for you. That can help you minimize disruptions, which is especially important this time of year.

5. Rents have skyrocketed in recent years. And, many buyers are looking to escape rising rents and avoid falling into the rental trap for another year. As an article from Zillow says:

“Over the next 12 months, rents are expected to grow more than inflation, the stock market and home values.”

Your home could be their ticket to leaving renting behind for good.

Bottom Line

There are still many reasons it makes sense to list your house during the holiday season. Let’s connect to determine if selling now is your best move.

Content previously posted on Keeping Current Matters

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What Homeowners Want To Know About Selling in Today’s Market

What Homeowners Want To Know About Selling in Today’s Market | Simplifying The Market

If you’re thinking about selling your house, you’re likely hearing about the cooling housing market and wondering what that means for you. While it’s not the peak intensity we saw during the pandemic, we’re still in a sellers’ market. That means you haven’t missed your window. Realtor.com explains:

“. . . while prospective home sellers may lament that they missed their prime window, in reality, this is still a terrific time to sell. In fact, according to a recent Realtor.com® home seller survey, 95% of sellers who sold their home in the past year got more than they paid for it.

Nonetheless, some of the more prominent pandemic trends have changed, so sellers might wish to adjust accordingly to get the best deal possible.”

The key to success today is being realistic and working with a trusted real estate advisor who can help you set your expectations based on where the market is now, not where it was over the past few years.

Here are a few things experts say today’s sellers need to consider.

Be Willing To Negotiate

At the peak of the pandemic frenzy, sellers held all the leverage because inventory was at record lows and buyers were willing to enter bidding wars over homes that were available. This year, the supply of homes for sale has increased as the market cooled. Even though inventory is still low overall, buyers today have more options, and with that comes more negotiation power.

As a seller, that means you may see more buyers getting an inspection, requesting repairs, or asking for help with closing costs today. You need to be prepared to have those conversations. As Ali Wolf, Chief Economist at Zonda, says:

“Today’s market is different than it was just six months ago. . . Sellers that want the contract to move forward should be willing to work with the buyer. . . Consider helping with the closing costs or addressing many of the items on the home inspection list.”

Price Your Home at Market Value

It’s not just that the number of homes for sale has grown this year. Buyer demand has also pulled back in light of higher mortgage rates. As a result, pricing your house appropriately so you can catch the eyes of serious buyers is important. Greg McBride, Chief Financial Analyst at Bankrate, explains:

Price your home realistically. This isn’t the housing market of April or May, so buyer traffic will be substantially slower, but appropriately priced homes are still selling quickly.”

You don’t want to overreach with your price and deter buyers. At the same time, you don’t want to undervalue your home and leave money on the table. This is another area where an agent’s expertise comes in handy.

Think About Your First Impression on Buyers

Buyers have more options and are more particular about their investment since it costs more to buy a home given today’s mortgage rates. As a result, you need to make sure your house shows well. As an article from realtor.com says:

To stand out in the market, sellers should make their home attractive to buyers, which usually means some selective updates.”

This could include everything from staging the home, to making small cosmetic updates, tackling repairs, or undergoing renovations. A trusted real estate professional will help you assess what may be worthwhile to do compared to other recently sold homes in your area.

Bottom Line

To sum it all up, your house should still sell today and move quickly if you’re realistic about today’s market. As a press release from Zillow puts it:

. . . sellers need to do things right to attract the attention of these buyers — pricing their home competitively and making their listing attractive to online home shoppers.”

For expert advice on how to quickly sell your house in a shifting market, let’s connect.

Content previously posted on Keeping Current Matters

Should You Update Your House Before You Sell? Ask a Real Estate Professional. [INFOGRAPHIC]

Should You Update Your House Before You Sell? Ask a Real Estate Professional. [INFOGRAPHIC] | Simplifying The Market

Should You Update Your House Before You Sell? Ask a Real Estate Professional. [INFOGRAPHIC] | Simplifying The Market

Some Highlights

  • You may be wondering what needs to be renovated before you sell your house. In today’s shifting market, making your house appealing is more important than ever.
  • That’s why it’s essential to lean on a real estate professional who has in-depth knowledge of today’s housing market. They know what buyers are looking for and how to highlight any upgrades you make.
  • Let’s connect so you know where to focus your efforts so your house will stand out in a today’s market.
Content previously posted on Keeping Current Matters

Top Questions About Selling Your Home This Winter

Top Questions About Selling Your Home This Winter | Simplifying The Market

There’s no denying the housing market is undergoing a shift this season, and that may leave you with some questions about whether it still makes sense to sell your house. Here are three of the top questions you may be asking – and the data that helps answer them – so you can make a confident decision.

1. Should I Wait To Sell?

Even though the supply of homes for sale has increased in 2022, inventory is still low overall. That means it’s still a sellers’ market. The graph below helps put the inventory growth into perspective. Using data from the National Association of Realtors (NAR), it shows just how far off we are from flipping to a buyers’ market:

Top Questions About Selling Your Home This Winter | Simplifying The Market

While buyers have regained some negotiation power as inventory has grown, you haven’t missed your window to sell. Your house could still stand out since inventory is low, especially if you list now while other sellers hold off until after the holiday rush and the start of the new year.

2. Are Buyers Still Out There?

If you’re thinking of selling your house but are hesitant because you’re worried buyer demand has disappeared in the face of higher mortgage rates, know that isn’t the case for everyone. While demand has eased this year, millennials are still looking for homes. As an article in Forbes explains:

At about 80 million strong, millennials currently make up the largest share of homebuyers (43%) in the U.S., according to a recent National Association of Realtors (NAR) report. Simply due to their numbers and eagerness to become homeowners, this cohort is quite literally shaping the next frontier of the homebuying process. Once known as the ‘rent generation,’ millennials have proven to be savvy buyers who are quite nimble in their quest to own real estate. In fact, I don’t think it’s a stretch to say they are the key to the overall health and stability of the current housing industry.”

While the millennial generation has been dubbed the renter generation, that namesake may not be appropriate anymore. Millennials, the largest generation, are actually a significant driving force for buyer demand in the housing market today. If you’re wondering if buyers are still out there, know that there are still people who are searching for a home to buy today. And your house may be exactly what they’re looking for.

3. Can I Afford To Buy My Next Home?

If current market conditions have you worried about how you’ll afford your next move, consider this: you may have more equity in your current home than you realize.

Homeowners have gained significant equity over the past few years and that equity can make a big difference in the affordability equation, even as mortgage rates climb. According to Mark Fleming, Chief Economist at First American:

“. . . homeowners, in aggregate, have historically high levels of home equity. For some of those equity-rich homeowners, that means moving and taking on a higher mortgage rate isn’t a huge deal—especially if they are moving to a more affordable city.” 

Bottom Line

If you’re thinking about selling your house this season, let’s connect so you have the expert insights you need to make the best possible move today.

Content previously posted on Keeping Current Matters

Home Equity: A Source of Strength for Homeowners Today

Home Equity: A Source of Strength for Homeowners Today | Simplifying The Market

Experts agree there’s no chance of a large-scale foreclosure crisis like we saw back in 2008, and that’s good news for the housing market. As Mark Fleming, Chief Economist at First American, says:

“. . . don’t expect a housing bust like the mid-2000s, as lending standards in this housing cycle have been much tighter and homeowners have historically high levels of home equity, so there likely won’t be a surge in foreclosures.”

Data from the Mortgage Bankers Association (MBA) helps tell this story. It shows the overall percentage of homeowners at risk is decreasing significantly with time (see graph below):

Home Equity: A Source of Strength for Homeowners Today | Simplifying The Market

But even though the volume of homeowners at risk is very low, there is still a small percentage of homeowners who may be coming face to face with foreclosure as a possibility today. If you’re facing difficulties yourself, it can help to understand your options. It starts with knowing what foreclosure is. Investopedia defines it like this:

Typically, default is triggered when a borrower misses a specific number of monthly payments . . . Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property.

The good news is there are alternatives available to help you avoid going through the foreclosure process, including:

  • Reinstatement
  • Loan modification
  • Deed-in-lieu of foreclosure
  • Short sale

But before you go down any of those paths, it’s worth seeing if you have enough equity in your home to sell it and protect your investment.

You May Be Able To Use Your Equity To Sell Your House

Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.

In today’s real estate market, many homeowners have far more equity in their homes than they realize due to the home price appreciation we’ve seen over the past few years. According to CoreLogic:

“The total average equity per borrower has now reached almost $300,000, the highest in the data series.”

So, what does that mean for you? If you’ve lived in your house for at least a few years or more, chances are your home’s value, and your equity, has risen dramatically. In addition, the mortgage payments you’ve made during that time chipped away at the balance of your loan. If your home’s current value is higher than what you still owe on your loan, you may be able to use that increase to your advantage.

Rick Sharga, Executive VP of Market Intelligence at ATTOM Data, explains how equity can help:

“Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure. . . We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.”

Lean on Experts To Explore Your Options

To find out how much equity you have, work with a local real estate professional. They can give you an estimate of what your house could sell for based on recent sales of similar homes in your area. You may be able to sell your house to avoid foreclosure.

If you find out you have to pursue other options, your agent can help with that too. They’ll be able to connect you with other professionals in the industry, like housing counselors, who can look into your unique situation and offer advice on next steps if selling isn’t your best alternative.

Bottom Line

If you’re a homeowner facing hardship, let’s connect so you have an expert on your side to explore your options and see if you can sell your house to avoid foreclosure.

Content previously posted on Keeping Current Matters