How Does the Supply of Homes for Sale Impact Buyer Demand?

The price of any item is determined by the supply of that item, as well as the market’s demand for it. The National Association of REALTORS (NAR) surveys “over 50,000 real  state practitioners about their expectations for home sales, prices and market conditions” for their monthly REALTORS Confidence Index. 

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National Association of Realtors Reports Show It’s A Great Time to Sell!

We all realize that the best time to sell anything is when the demand for that item is high and the supply of that item is limited. The last two major reports issued by the National Association of Realtors (NAR) revealed information that suggests that right now continues to be a great time to sell your house.

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What Does the Future Hold for Home Prices?

Home prices are at the top of everyone’s minds. Can they maintain their current pace of appreciation? Will rising mortgage rates negatively impact home values? Will the next

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Another Reason Existing Home Sales are Down.

 

The latest Existing Home Sales Report issued by the National Association of Realtors (NAR) revealed that home sales have decreased for four consecutive months

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Top 2 Myths About Today’s Real Estate Market

There are many conflicting headlines when it comes to describing today’s real estate market. Some are making comparisons to the market we experienced 10 years ago and are starting to believe that we may be doomed to repeat ourselves. Others are just plain wrong when it comes to what it takes to qualify for a mortgage.

Today, we want to try and clear the air by shedding some light on what’s causing some of these headlines, as well as what’s truly going on.

Myth #1: We Are Headed for Another Housing Bubble

Home prices have appreciated year-over-year for the last 76 straight months. Many areas of the country are at or near their peak prices achieved before the last housing bubble burst. This has many worried that we are headed towards another housing bubble.

Reality: The biggest challenge facing today’s real estate market is a lack of homes for sale! Demand is strong, as many renters have come off the fence and are searching for their dream homes.

Historically, a normal market requires a 6-month supply of inventory in order for prices to rise with the rate of inflation. According to the National Association of Realtors (NAR) there is currently a 4.3-month supply of inventory.

The US housing market hasn’t had 6-months inventory since August 2012! The concept of supply and demand is what had been driving home prices up!  Now they are leveling off and in fact have gone down slightly.

Myth #2: The Rumored Recession Will Lead to Another Housing Market Crash

Economists and analysts know that the country has experienced economic growth for almost a decade. When this happens, they also know that a recession can’t be too far off. But what is a recession?

Merriam-Webster defines a recession as “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two consecutive quarters.”

Reality: Recession DOES NOT equal housing crisis. Many people associate these two terms with one another because the last time we had a recession it was caused by a housing crisis. According to the Federal Reserve, over the last 40 years, there have been six recessions. In each of the previous five recessions, home values appreciated (on a national basis).  Of course the old adage location , location, location still holds true.

I do expect real estate, especially residential real estate, to outperform securities in the next recession.

The big overarching issue with hosing at this time is that interest rates for 30 year fixed mortgages are up a little over 0.7% year-over-year (YoY) basis and prices have also increased on a YoY basis and that trend can’t continue.

John Paul Ledesma, GRI | Broker Associate | HomeSmart Evergreen Realty| DRE 01810644 | 949-616-2988

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5 Real Estate Reality TV Myths Explained

 

Have you ever been flipping through the channels, only to find yourself glued to the couch in an HGTV binge session? We’ve all been there, watching entire seasons of “Love it or List it,” “Million Dollar Listing,” “House Hunters,” “Property Brothers,” and so many more all in one sitting.

When you’re in the middle of your real estate themed show marathon, you might start to think that everything you see on TV must be how it works in real life, but you may need a reality check.

Reality TV Show Myths vs. Real Life:

Myth #1: Buyers look at 3 homes and decide to purchase one of them.
Truth: There may be buyers who fall in love and buy the first home they see, but according to the National Association of Realtors the average homebuyer tours 10 homes as a part of their search.  

Myth #2: The houses the buyers are touring are still for sale.
Truth: Everything is staged for TV. Many of the homes being shown are already sold and are off the market. 

Myth #3: The buyers haven’t made a purchase decision yet.
Truth: Since there is no way to show the entire buying process in a 30-minute show, TV producers often choose buyers who are further along in the process and have already chosen a home to buy. 

Myth #4: If you list your home for sale, it will ALWAYS sell at the open house.
Truth: Of course, this would be great! Open houses are important to guarantee the most exposure to buyers in your area but are only a PIECE of the overall marketing of your home. Keep in mind that many homes are sold during regular showing appointments as well. 

Myth #5: Homeowners decide to sell their homes after a 5-minute conversation.
Truth: Similar to the buyers portrayed on the shows, many of the sellers have already spent hours deliberating the decision to list their homes and move on with their lives/goals.

Bottom Line

Having an experienced professional on your side while navigating the real estate market is the best way to guarantee that you can make the home of your dreams a reality!

John Paul Ledesma, GRI | Broker Associate | HomeSmart Evergreen Realty| DRE 01810644 | 949-616-2988

 

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California August 2018 sales

The California housing market is shifting with sales down and price growth decelerating on a year over year basis.  On a month to month basis prices have slightly decreased for a second consecutive month.  Buyers are hesitant to enter the market as many believe the market may have peaked.

The Southern California region sales declined the most among all regions, with a drop of 7.9 percent from last year, as median process increased on a year-over-year basis (for the month of August) for all counties.  With the school districts starting earlier in the year in many Southern California areas that is certainly a factor in the sales volume slow-down.

 

John Paul Ledesma, GRI | Broker Associate | HomeSmart Evergreen Realty| DRE 01810644 | 949-616-2988

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Selling Your Home? Here’s 2 Ways to Get the Best Price!

***  ONLINE vs REALTOR® Competitive Market Analysis Click HERE.  ***

Every homeowner wants to make sure that they maximize their financial reward when selling their home, but how do you guarantee that you receive the maximum value for your house?

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