Todays Real Estate Market Explained Through 4 Key Trends

As we move into the second half of the year, one thing is clear: the current real estate market is one for the record books. The exact mix of conditions we have today creates opportunities for both buyers and sellers. Here's a look at four key components that are shaping this unprecedented market.

A Shortage of Homes for Sale

Earlier this year, the number of homes available for sale fell to an all-time low. In recent months, however, inventory levels are starting to trend up. The latest Monthly Housing Market Trends Report from realtor.com says:

In June, newly listed homes grew by 5.5% on a year-over-year basis, and by 10.9% on a month-over-month basis. Typically, fewer newly listed homes appear on the market in the month of June compared to May. This year, growth in new listings is continuing later into the summer season, a welcome sign for a tight housing market.

This is good news for buyers who crave more options. But even though were experiencing small gains in the number of available homes for sale, inventory remains a challenge in most states. That's why its still a sellers market, giving homeowners immense leverage when they decide to make a move.

Buyer Competition and Bidding Wars

Todays ongoing low supply, coupled with high demand, creates a market characterized by high buyer competition and bidding wars. Buyers are going above and beyond to make sure their offer stands out from the crowd by offering over the asking price, all cash, or waiving some contingencies. The number of offers on the average house for sale broke records this year and that's great news for sellers.

The latest Confidence Index from the National Association of Realtors (NAR) says the average home for sale receives five offers (see graph below):For buyers, the best way to put a compelling offer together is by working with a local real estate professional. That agent can act as your trusted advisor on what terms are best for you and what's most appealing to the seller.

Home Price Appreciation

The competition among buyers is driving prices up. Over the past year, we've seen home price appreciation rise across the country. According to the most recent Home Price Index (HPI) from CoreLogic, national home prices increased 15.4% year-over-year in May:

The May 2021 HPI gain was up from the May 2020 gain of 4.2% and was the highest year-over-year gain since November 2005. Low mortgage rates and low for-sale inventory drove the increase in home prices.

Rising home values are a big part of why real estate remains one of the top sought-after investments for Americans. For potential sellers, it also means its a great time to list your house to maximize the return on your investment.

A Rise in Home Values and Equity

The equity in a home doesn't just grow when a homeowner pays their mortgage it also grows as the homes value appreciates. Thanks to the jump in price appreciation, homeowners across the country are seeing record-breaking gains in home equity. CoreLogic recently reported:

homeowners with mortgages (which account for roughly 62% of all properties) have seen their equity increase by 19.6% year over year, representing a collective equity gain of over 1.9 trillion, and an average gain of 33,400 per borrower, since the first quarter of 2020.

That's a major perk for households to leverage. Homeowners can use that equity to accomplish major life goals or move into their dream homes.

Bottom Line

If you're thinking about buying or selling, there's no time like the present. Lets connect to talk about how you can take advantage of the conditions were seeing today to meet your homeownership goals.

 

 

Improve Your Home’s Organization!

Organization is an important part of keeping your home clean and tidy. Unfortunately, organization doesn’t always come easy to homeowners. It may be that your home just lacks the storage solutions that you need to effectively organize, or your house simply isn’t large enough to effectively contain all your family’s stuff. Maybe there is enough room, but the way your rooms are laid out makes things a bit difficult. Whatever the reason, you might feel like you’re fighting an uphill battle with organization and that it never lasts as long as you’d like.

There is no one-size-fits-all solution to getting your house organized, but there are some things that might help. Not all of these suggestions are likely to fit your specific situation, but a few might point you in the right direction to start getting a better grip on your home’s organization. Even if the individual suggestions don’t fully apply to your home and its layout, they still might give you ideas that will help you get your home’s excessive disarray under control.

Adjust Your Storage Methods

There are a number of things that you can do to help improve the storage options in your home. Here are a few suggestions:

• Don’t organize spices or dry goods items based on their names; sort them based on frequency of use instead. This lets the things that you use most often be near the front of your storage and those things that are less frequently used can go in the back or on a harder-to-reach shelf.
• Label folders, boxes, and any other long-term storage containers. You should also avoid having a catch-all or miscellaneous option; put things where they go at the start, instead of dealing with an ever-growing pile in need of sorting.
• Use dividers to improve organization in your drawers, allowing you to store multiple types of items together without causing a significant amount of clutter.
• Install hooks for coats and set up a container to hold shoes near your main entryway, then make sure that members of your household use both. This will help prevent those shoes, jackets, and coats from ending up strewn all over the house.

It’s also important to note that the solution for running low on storage isn’t to simply buy extra storage containers. If you’re running low on storage space, sort through what’s currently in storage and see if you can pare things down before adding additional storage.

Out With the Old, In With the New

A big cause of clutter and running low on space is buying new and upgraded products while still holding on to the items that they’re replacing. This doesn’t mean that you should only own one jacket or a single purse, of course; it makes sense to have multiples of some items, so long as the older items are still actively being used. If you buy something with the clear intention of replacing something else but that something else is still sticking around unused, though, then there may be a problem.

Electronics are the biggest culprit here; if you get a new phone or tablet, you should sell, donate, or give away the old one instead of sticking it in a drawer to take up space. The same goes with clothes that are damaged or threadbare, purses or backpacks with broken straps or other damage, and all those other items that you tell yourself you’ll get fixed eventually but never do. Go through all your old items that haven’t been touched for 6 months or more and see what you can get rid of. You should also get in the habit of prepping old items for donation soon after picking up a newer model.

Give Your Layout a Makeover

In some cases, all that it takes is a rearranging of furniture or some changes to your home’s layout to open up some extra space and cut back on the clutter. In many cases you can do this yourself, though you may decide to bring in a professional decorator or a decluttering pro to help. If you do decide this is the way to go, HomeKeepr is here to help. Sign up for a free account today and get connected with the pros who’ll help you conquer the clutter for good.

4 Major Incentives To Sell This Summer

While the housing market forecast for the second half of the year remains positive, there may not be a better time to sell than right now. Here are four things to consider if you're trying to decide if now's the right time to make a move.

1. Your House Will Likely Sell Quickly

According to the most recent Realtors Confidence Index released by the National Association of Realtors (NAR), homes continue to sell quickly. The report notes homes are selling in an average of just 17 days.

Average days on market is a strong indicator of buyer competition, and homes selling quickly is a great sign for sellers. Its one of several factors that indicate buyers are motivated to do what it takes to purchase the home of their dreams.

2. Buyers Are Willing To Compete for Your House

In addition to selling fast, homes are receiving multiple offers. NAR reports sellers are seeing an average of 5 offers, and these offers are competitive ones. Shawn Telford, Chief Appraiser at CoreLogic, said in a recent interview:

The frequency of buyers being willing to pay more than the market data supports is increasing.

This confirms buyers are ready and willing to enter bidding wars for your home. Receiving several offers on your house means you can select the one that makes the most sense for your situation and financial well-being.

3. When Supply Is Low, Your House Is in the Spotlight

One of the most significant challenges for motivated buyers is the current inventory of homes for sale, which while improving, remains at near-record lows. As NAR details:

Total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April’s inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April’s 2.4-month supply but down from 4.6-months in May 2020.

There are signs, however, that more homes are coming to market. Odeta Kushi, Deputy Chief Economist at First American, notes:

It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.

If you're looking to take advantage of buyer demand and get the most attention for your house, selling now before more listings come to the market might be your best option.

4. If You're Thinking of Moving Up, Now May Be the Time

Over the past 12 months, homeowners have gained a significant amount of wealth through growing equity. In that same period, homeowners have also spent a considerable amount of time in their homes, and many have decided their house doesn't meet their needs.

If you're not happy with your current home, you can leverage that equity to power your move now. Your equity, plus current low mortgage rates, can help you maximize your purchasing power.

But these near-historic low rates wont last forever. Experts forecast interest rates will increase in the coming months. Nadia Evangelou, Senior Economist and Director of Forecasting at NAR, says:

Nevertheless, as the economic outlook for the United States looks brighter for the rest of the year, mortgage rates are expected to rise in the following months.

As interest rates rise, even modestly, it could influence buyer demand and your purchasing power. If you've been waiting for the best time to sell to fuel your move up, you likely wont find more favorable conditions than those were seeing today.

Bottom Line

With supply challenges, low mortgage rates, and extremely motivated buyers, sellers are well-positioned to take advantage of current market conditions right now. If you're thinking about selling, lets connect today to discuss why it makes sense to list your home sooner rather than later.

 

Why This Isn't Your Typical Summer Housing Market

Why This Isn't Your Typical Summer Housing Market

In real estate, its normal to see ebbs and flows in the market. Typically, the summer months are slower-paced than the traditionally busy spring. But this isn't a typical summer. As the economy rebounds and life is returning to normal, the real estate market is expected to have an unusually strong summer season.

Here's how this summer is stacking up against the norm and what it means for you.

Inventory is increasing.

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), inventory levels have been rising since February of this year. Looking at the graph below, there's a clear upward trend, as shown in the green bars. Currently, there's roughly a 2.5 months supply of homes for sale. And while inventory is trending up as more houses are coming to the market, its still much lower than several of the previous summers, as the orange bars indicate.If you're looking to buy, some relief is on the way in the form of more homes coming to the market. Just remember, we still have less inventory than the norm, so be patient in your search.

If you're thinking of selling, now is the time. Work with your agent to list your house before it has more competition on the market.

Time on the market is still shorter than normal.

Unlike the typical summer trend, time on the market is moving at the fastest speed we've seen since NAR started collecting this survey-based information in 2011. The most recent Realtors Confidence Index shows that the average home is on the market for just 17 days, as shown in green in the graph below. This means houses are selling at a much faster pace than a typical summer, which the orange bars represent.If you're looking to buy, this means you need to be prepared to move fast. Brace for a quick pace and rely on your agent to stay in the know on the available homes in your area.

If you're thinking of selling, data shows your house will likely sell quickly. If you're worried about where you'll go once your house sells, consider a newly built home as a good way to move up.

Price appreciation is still rising.

The last big factor making this an unusually strong market this summer is home price appreciation. According to the State House Price Index from the Federal Housing Finance Agency (FHFA), were currently experiencing double-digit house price appreciation and have an average of 12.6% appreciation across the country. The graph below uses data from NAR to show a more granular view of how prices have changed month-to-month over the past few years. The green bars show the current price appreciation were experiencing today. Our current levels are well above what we've seen in recent summers, shown by the orange bars.If you're looking to buy, competition and bidding wars are driving prices up. Getting pre-approved on show the seller you're serious and help you know what you can afford. Once you do, work with your agent to make a strong offer that stands out.

If you're thinking of selling, seize this opportunity to use your additional equity from this price appreciation to power your next move.

Bottom Line

This isn't a typical summer. Whether you're buying or selling, lets connect to talk about how you can capitalize on todays market conditions to sell your house or find your dream home.

 

 

Garage Doors for Convertible Spaces

When you think of a garage area, most likely the first thing that comes to mind is a place to store your car or other vehicles. You might also picture some shelving or storage on some of the walls, but for most people, the garage is largely a single-purpose structure. It doesn’t have to be this way, however; for an increasing number of homeowners, the garage is becoming a multipurpose room with easy access to fresh air, light, and the outside in general via the garage doors.

There are a lot of options available when it comes to converting a garage into some other space. To really get the most out of these conversions, you might consider upgrading or changing your garage door as well. The type of door that you have can make a big difference in the overall effectiveness of your converted space, so here are some things you should keep in mind when choosing your new garage door.

What Will You Use It For?

There are several ways that you could use a garage for something other than just storing your car and little bits of assorted outdoor junk. Common garage conversions include building a personal gym, making a craft room or other creative space, creating a lounge area that connects to an external patio, or even making a learning space for children who are learning from home. You might be surprised at how much of a difference some paint and the right flooring can make when it comes to a garage space!

Regardless of what you use the space for, you’ll likely want to change out the garage door to get the most out of the space. While having the option to open the door to increase access to your garage space is usually desirable, having a solid garage door probably won’t be ideal for the garage’s new purpose. That’s why it’s important to think about the actual purpose of the room, since that can affect the type of garage door you need.

Choosing the Right Door

There are a few different garage door options that you might choose depending on your needs. While some garage doors have small window spaces and that can be useful if you just want to add a little bit of light, garage doors made of clear plexiglass panels can provide much more light and a largely unobstructed view, which is ideal if you are using the garage space as a lounge area or have plants growing inside. Side-mounted garage doors that roll back along a side wall instead of the ceiling can also be useful, allowing you to control the size of the entryway if the converted area is being used more as a standard room. If you plan to decorate the door like you would any other wall, a single-panel garage door that opens without bending or rolling might be your best bet.

These are only a few of the options that are available when it comes to picking a garage door that meets your needs. Some options even work as add-ons that can work with many door types, such as a screen that allows fresh air and light in while the door is open but keeps out the bugs and other unpleasantness much like a standard screen door would. These sorts of add-ons provide even more possibilities and allow you to further customize your garage space to meet your specific needs.

Garage Door Installation

Whether you’re doing a complete remodel of your garage space or simply want a different door to make the area more useful, you’re likely going to want your new door professionally installed. You may even need a contractor to help you convert your garage into the convertible space you have in mind. Whatever your needs are, HomeKeepr can help. Sign up for a free account today to connect with the pros you need to get the job done.

Housing Supply Is Rising. What Does That Mean for You?

An important factor in todays market is the number of homes for sale. While inventory levels continue to sit near historic lows, there are indications we may have hit the lowest point well see. Odeta Kushi, Deputy Chief Economist at First American, recently said of our supply challenges:

It looks like inventory may have hit a bottom (we've seen this in the higher frequency data as well). Unsold inventory in May was at 2.5 months supply, up from 2.4.

To put it into perspective, the graph below shows levels of inventory rising since the beginning of the year:Were still not close to a balanced market, which would be a 6 months supply of homes for sale. However, we are seeing a slow but steady increase in homes coming up for sale. And that leaves many buyers and sellers wondering the same thing: what does that mean for me?

Buyers: More Options Are Arriving, so Its Time To Act

If you're a buyer, more inventory coming to market is a welcome sight. More supply means more options and less competition, which could mean fewer bidding wars.

According to the latest Monthly Housing Market Trends Report, supply levels are continuing to increase, which is different from the typical summer market:

In June, newly listed homes grew by 5.5% on a year-over-year basis, and by 10.9% on a month-over-month basis. Typically, fewer newly listed homes appear on the market in the month of June compared to May. This year, growth in new listings is continuing later into the summer season, a welcome sign for a tight housing market.

If you're having trouble finding your next home, this news should give you the hope and motivation to keep your buying process moving forward. Experts project mortgage rates will begin increasing, which will make purchasing a home less affordable as time passes. You can still capitalize on todays low interest rates, so stick with your search as more homes come to market.

Sellers: Our Supply Challenges Aren't Over Yet, so Now Is the Time To Sell

If you've been putting off selling your house, you shouldn't wait much longer. The years month-over-month gains in homes for sale have helped buyers, but were still very much in a sellers market.

As the graph below shows, even with the number of homes for sale rising, were still well below the supply levels we've seen historically:Of course, more homes are coming to market now, and more are expected in the coming months. Selling your house this summer gives you the chance to get ahead of the competition and maximize your sales potential before more homes are put up for sale in your neighborhood.

Bottom Line

More homes for sale means more options for buyers and more competition for sellers. Whether you're looking to buy or sell, lets connect today to discuss your options and why its still a good time to make your move.

 

Diving Deep into Todays Biggest Buyer Concerns

Last week, Fannie Mae released their Home Purchase Sentiment Index (HPSI). Though the survey showed 77% of respondents believe its a good time to sell, it also confirms what many are sensing: an increasing number of Americans believe its a bad time to buy a home. The percentage of those surveyed saying its a bad time to buy hit 64%, up from 56% last month and 38% last July.

The latest HPSI explains:

Consumers also continued to cite high home prices as the predominant reason for their ongoing and significant divergence in sentiment toward homebuying and home-selling conditions. While all surveyed segments have expressed greater negativity toward homebuying over the last few months, renters who say they are planning to buy a home in the next few years have demonstrated an even steeper decline in homebuying sentiment than homeowners. Its likely that affordability concerns are more greatly affecting those who aspire to be first-time homeowners than other consumer segments.

Lets look closely at the market conditions that impact home affordability.

A mortgage payment is determined by the price of the home and the mortgage rate on the loan used to purchase it. Lately, monthly mortgage payments have gone up for buyers for two key reasons:

1. Mortgage rates have increased from 2.65% this past January to 2.9%.
2. Home prices have increased by 15.4% over the last 12 months.

Based on these rising factors, a home may be less affordable today, but it doesn't mean its not affordable.

Three weeks ago, ATTOM Data released their second-quarter 2021 U.S. Home Affordability Report which explained that the major ownership costs on the typical home as a percent of the average national wage had increased from 22.2% in the second quarter of 2020 to 25.2% in the second quarter of this year. They also went on to explain:

Still, the latest level is within the 28 percent standard lenders prefer for how much homeowners should spend on mortgage payments, home insurance and property taxes.

In the same report, Todd Teta, Chief Product Officer with ATTOM, confirms:

Average workers across the country can still manage the major expenses of owning a home, based on lender standards.

Its true that monthly mortgage payments are greater than they were last year (as the ATTOM data shows), but they're not unaffordable when compared to the last 30 years. While payments have increased dramatically during that several-decade span, if we adjust for inflation, todays mortgage payments are 10.7% lower than they were in 1990.

What's that mean for you? While you may not get the homebuying deal someone you know got last year, that doesn't mean you shouldn't still buy a home. Here are your alternatives to buying and the trade-offs you'll have with each.

Alternative 1: Ill rent instead.

Some may consider renting as the better option. However, the monthly cost of renting a home is skyrocketing. According to the July National Rent Report from Apartment List:

So far in 2021, rental prices have grown a staggering 9.2%. To put that in context, in previous years growth from January to June is usually just 2 to 3%. After this months spike, rents have been pushed well above our expectations of where they would have been had the pandemic not disrupted the market.

If you continue to rent, chances are your rent will keep increasing at a fast pace. That means you could end up spending significantly more of your income on your rental as time goes on, which could make it even harder to save for a home.

Alternative 2: Ill wait it out.

Others may consider waiting for another year and hoping that purchasing a home will be less expensive then. Lets look at that possibility.

We've already established that a monthly mortgage payment is determined by the price of the home and the mortgage rate. A lower monthly payment would require one of those two elements to decrease over the next year. However, experts are forecasting the exact opposite:

• The Mortgage Bankers Association (MBA) projects mortgage rates will be at 4.2% by the end of next year.
• The Home Price Expectation Survey (HPES), a survey of over 100 economists, investment strategists, and housing market analysts, calls for home prices to increase by 5.12% in 2022.

Based on these projections, lets see the possible impact on a monthly mortgage payment:By waiting until next year, you'd potentially pay more for the home, need a larger down payment, pay a higher mortgage rate, and pay an additional 3,696 each year over the life of the mortgage.

Bottom Line

While you may have missed the absolute best time to buy a home, waiting any longer may not make sense. Mark Fleming, Chief Economist at First American, says it best:

Affordability is likely to worsen before it improves, so try to buy it now, if you can find it.