Understanding the Surge: Key Factors Driving Home Price Increases

Why Home Prices Keep Going Up If you've ever dreamed of buying your place or selling your current house to upgrade, you're no stranger to the rollercoaster of emotions that changing home prices can stir up. It's a tale of financial goals, doubts, and a dash of anxiety that many have been through. But if you put off moving because you’re worried home prices might drop, make no mistake, they’re not going down. In fact, it's just the opposite. National data from several sources says they’ve been going up consistently this year (see graph below):   Here’s what this graph shows. Home prices rose significantly in the first half of 2022 (the green bars on the left side of the graphs above). Those increases were dramatic and unsustainable. So, in the year's second half, prices went through a correction and started dipping a bit (shown in red). But those slight declines were shallow and short-lived. Still, the media focused on those drops in their headlines, which created a lot of fear and uncertainty among consumers. But here’s what hasn’t been covered fully. So far in 2023, prices are increasing again, but at a more normal pace (the green bars on the right side of the graphs above). After price gains that were too high and the corrections that followed in 2022, all three reports show that more normal price appreciation this year is good news for the housing market. Orphe Divounguy, Senior Economist at Zillow, explains changing home prices over the past 12 months this way:  “The U.S. housing market has surged over the past year after a temporary hiccup from July 2022-January 2023. . . . That downturn has proven to be short lived as housing has rebounded impressively so far in 2023. . .” Looking ahead, home price appreciation typically starts to ease up this time of year. As that happens, there’s some risk the media will confuse slowing price growth (deceleration of appreciation) with home prices falling (depreciation). Don’t be fooled. Slower price growth is still growth. Why Are Home Prices Increasing Now? Home prices are going back up because there still aren't enough homes for sale for all the people who want to buy them. Even though higher mortgage rates cause buyer demand to moderate, they also cause the supply of available homes to decrease. That’s because of the mortgage rate lock-in effect. When rates rise, some homeowners are reluctant to sell and lose their current low mortgage rate to take on a higher one for their next home. So, with higher mortgage rates impacting both buyers and sellers, the supply and demand equation of the housing market has been affected. But since more people still want to purchase homes than there are homes available to buy, prices continue to rise. As Freddie Mac states:  “While rising interest rates have reduced affordability—and therefore demand—they have also reduced supply through the mortgage rate lock-in effect. Overall, it appears the reduction in supply has outweighed the decrease in demand, thus house prices have started to increase . . .” Here’s How This Impacts You Buyers: If you've been waiting to buy a home because you were afraid its value might drop, knowing that home prices have returned should make you feel better. Buying a home allows you to own something more valuable over time. Sellers: If you've been holding off on selling your house because you were worried about how changing home prices would impact its value, it could be smart to work with a real estate agent and put your house on the market. You don't have to wait any longer because the most recent data indicates home prices have turned in your favor. Bottom Line If you put off moving because you worried that home prices might go down, data shows they’re increasing nationwide. Let’s connect so you can understand how home prices are changing in our local area.

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Key Insights on Home Price Growth's Return to Normalcy [INFOGRAPHIC] 2023 Update

Home Price Growth Is Returning to Normal [INFOGRAPHIC] Some Highlights If you're wondering what’s happening with home prices, know they’re still rising at a slower pace – and that’s perfectly normal for this time of year.   Based on typical seasonality in the market, prices increase most in the spring during the peak buying season, and then price growth slows down as the year progresses. Home prices aren’t falling. They’re just rising slower and going back to normal seasonal trends. That’s a good thing. If you're curious about prices in our area, let’s connect.

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Risks of Selling Your Home Without a Realtor: What Every Seller Should Know

The Risks of Selling Your House on Your Own Are you considering selling your house as a For Sale by Owner (FSBO)? If so, know there's much more time and expertise needed in that process than you might think. While the idea of doing it all alone might seem tempting, it's essential to recognize the challenges you may face if you take it all alone. As a recent article from Bankrate explains: “Choosing the right price, crafting a compelling listing, marketing to potential buyers, coordinating showings, preparing paperwork: All of these are tasks that, in the absence of a real estate agent, you will have to do yourself.” Here’s a bit more information on a few things and how you may miss out if you don’t use an agent. You May Not Price it Right. Pricing your house right is key to a successful sale. Real estate agents have experience navigating this housing market and understand the art of pricing a home to sell today. Unfortunately, homeowners who sell on their own often lack this all-important experience. That can lead to two expected consequences: overpricing or underpricing the house. An article from Nerd Wallet offers this advice: “If your home is overpriced, you run the risk of buyers not seeing the listing. . . . But price your house too low and you could end up leaving some serious money on the table. A bargain-basement price could also turn some buyers away, as they may wonder if there are any underlying problems with the house.” Don’t run this risk. Instead, partner with an agent to ensure your house is priced at current market value so it catches the eyes of eager buyers. This will put your house in a position to make the best first impression possible. You Don’t Have as Much Experience in Marketing a House In this digital age, online marketing has become a game-changer, especially when selling your house. A recent report from the National Association of Realtors (NAR) explains: “Among all generations of home buyers, the first step taken in the home search process was to look online for properties.” When you partner with a real estate agent who knows how to take advantage of online marketing tools and resources, you'll be able to get in front of these tech-savvy house hunters, boosting your chances of a successful sale. But, if you're attempting to sell your house alone, you might miss out on the full power of online and social media strategies. You May Not Be Comfortable Handling All the Back-and-Forth When you decide to sell your house, you're not just on a quest to find a buyer but also stepping into a world of negotiations. You’ll have to coordinate with many people, including the buyer, the buyer’s agent, the inspection company, the appraiser, and more. It's a dance where every move counts and the expertise of a real estate agent can make a world of difference in keeping these negotiations on track and sealing the deal. As NerdWallet says: “Your listing agent will also, of course, be on your side throughout negotiations. They'll double-check paperwork that comes through, communicate with the buyer's agent and other parties to the sale, and generally stay on top of things through to closing day.” Bottom Line If you're considering selling your house and the idea of going it alone has crossed your mind, think through that decision carefully. Let's connect to discuss how a real estate agent has the experience needed to take all that stress off your plate.

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Maximizing Your Profits: A Seller's Guide to Successful Real Estate Transactions

Maximizing Profits: A Seller's Guide to Real Estate Success Selling a property can be challenging, but with the right strategies and knowledge, you can ensure a successful and profitable transaction in the real estate market. This blog will discuss essential tips to help sellers maximize their profits and succeed in the real estate market. Home Preparation for Real Estate Success: First impressions matter when it comes to selling a home. Before listing your property, invest time preparing it to attract potential buyers. Key steps include decluttering, deep cleaning, and staging, which can significantly enhance your home's appeal. Please consider making repairs and renovations; however, ensure they align with your budget and focus on improvements that offer the best return on investment. Setting the Right Price: Determining the right price for your property is crucial. Overpricing can deter potential buyers, while underpricing may cost you money. You should consult a professional real estate agent to help you arrive at an accurate and competitive listing price. Real estate agents can access comprehensive market data and assess your property's value based on recent sales and market trends. Effective Marketing Strategies: To attract the right buyers, an effective marketing strategy is essential. Utilize professional photography, virtual tours, and detailed property descriptions to grab the attention of potential buyers. Expand your reach by leveraging online and offline marketing channels like listing websites, social media platforms, open houses, and real estate publications. Negotiation Skills: Negotiation skills play a vital role in maximizing profits. Be prepared to negotiate with potential buyers to secure the best possible price. Establish a bottom line and be open to compromises on certain aspects, such as closing costs or repairs. A successful negotiation should result in a win-win situation where both parties are satisfied with the outcome. The Closing Process: The closing process involves various legal and financial procedures. Ensure all necessary paperwork, inspections, and appraisals are completed accurately and on time. Being well-prepared and organized during closing can help avoid delays and ensure a smooth transaction. Understanding Tax Implications: Understanding tax implications is vital for maximizing your profits. You can consult a tax advisor to determine any capital gains tax or other tax obligations associated with selling your property. Proper tax planning can help you minimize tax liabilities and retain more profits. The Value of a Real Estate Agent: Working with a professional real estate agent is invaluable. You can choose an agent with a proven track record and expertise in your local market. An experienced agent can guide you through the entire selling process, provide accurate pricing advice, negotiate, and ensure you're doing a smooth closing. Handling Unique Cases: Every real estate transaction is unique, and sometimes sellers encounter challenging situations. Whether dealing with difficult tenants, selling an inherited property, or navigating a divorce, consult a real estate professional with experience handling such cases. They can offer tailored guidance to help you overcome obstacles and maximize profits. Post-Sale Considerations: After closing the deal, make sure to tie up any loose ends. Cancel utilities, transfer insurance, and update your address with relevant institutions. Additionally, consider leaving a positive review for your real estate agent, as referrals and recommendations can be beneficial in the future. Maximizing profits as a seller requires careful planning, effective marketing, and skilled negotiation. Following these tips and working with a professional real estate agent can increase your chances of achieving a successful sale and maximizing your profits. Best of luck on your real estate journey!

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