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REALTORS® Expect Modest Price Growth in Next 12 Months

by Eric Butler

REALTORS® Expect Modest Price Growth in Next 12 Months

With rising inventory  and modest expectations of demand growth,  REALTORS®  responding  to the  October 2014 survey expected home prices to increase modestly in the next 12 months, according to data gathered from the October 2014 REALTORS® Confidence Index Survey:  http://www.realtor.org/reports/realtors-confidence-index[1]. Local conditions vary with expectations anchored on factors such as the level of inventory, the state of the local job market, and credit conditions.

The median expected price increase is about 3 percent.  The map shows the median expected price change in the next 12 months based on the August – October 2014 surveys[2]. No state had a median expected price growth above 5 percent.  States  with the most upbeat price expectations (orange) include California, Washington, North Dakota, Texas, Florida, Georgia, the District of Columbia, and Massachusetts–states with strong housing markets, job growth, and economies.

 

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[1]               The median expected price change is the value such that 50 percent of respondents expect prices to change above this value and 50 percent of respondents expect prices to change below this value.  A median expected price change is computed for each state based on the respondents for that state. The graph shows the range of these state median expected price change. To increase sample size, the data is averaged from the last three survey months.

[2]               In generating the median price expectation at the state level, we use data for the last three surveys to have close to 30 observations. Small states such as AK,ND, SD, MT, VT, WY, WV, DE, and the D.C. may have less than 30 observations.

Tips For Home Sellers

by Eric Butler

TIPS FOR HOME SELLERS

When preparing your home for sale, a number of simple cosmetic changes often provide the biggest return on investment. Here are three tips to upgrade your house without breaking the bank:

  • Bring in the light. The right light creates the right mood. Adding lights to dark rooms can make your home feel warm and inviting. Bring outdoor light inside by opening curtains and installing economical suntubes.
  • Create Space. Many of today's buyers are looking for open rooms. Consider removing unwanted walls to make your home feel more spacious. Buyers will often pay a premium to get a bit of extra room.
  • Replace Flooring. Get rid of that old carpet in the den and replace it with today's newer hardwoods and laminates. You don't have to spend a lot to make a big impression!

These simple tips can help you sell your home and take advantage of today's market. Please contact us if you have any questions about selling your home. We are here to help!

Improving Job Gains

by Eric Butler

Improving Job Gains
Better than expected labor market data was unfavorable for mortgage rates over the past week. Increased concerns about the situation in Ukraine had a greater impact, however, and the flight to safer assets more than offset the jobs data. Mortgage rates ended the week lower, at the best levels of the year.

The headline number for April job gains showed the largest monthly increase since January 2012. Against a consensus forecast of 215K, the economy added 288K jobs in April. Average job gains over the last three months were an impressive 238K, up from 167K over the prior three months. In addition, the Unemployment Rate dropped from 6.7% to 6.3%, the lowest level since September 2008.

The results of the Employment report likely would have been worse for mortgage rates except that some of the details were less encouraging. According to the survey used to determine the Unemployment Rate, an enormous 806K people left the labor force in April, which was responsible for most of the decline in the Unemployment Rate. The Participation Rate, essentially the number of people able to work who are currently in the labor force, fell to 62.8% from 63.2%, near the lowest levels since 1978. Average Hourly Earnings, a proxy for wage growth, showed no gains. In short, job gains in April reflected a strong rebound from weather-related winter weakness, but investors are hoping to see further improvement before they alter their long-term outlook.

Looking ahead, events outside the U.S. could have a major influence on U.S. mortgage rates. The next European Central Bank (ECB) meeting on May 8 could have an impact as they consider a new bond purchase program. Global bond yields have fallen in anticipation of this possible program. As has been seen recently, changes in the situation in Ukraine also could affect mortgage rates at any time. Upcoming U.S. economic data includes Retail Sales and the monthly inflation reports. 

The Real Estate Market has Shifted

by Eric Butler

Nationally, and here in the Eastern Panhandle of WV, the Real Estate market has shifted. We have traveled through a long buyers market and now with a much lower inventory of homes for sale, we are entering a sellers market. 

What does this mean for home buyers? First of all, it means that typically a buyer will not have the negotiating power that they had during the buyers market. Good homes that are priced reasonably sell quickly and many with multiple offers. This means that a buyer may have to give it their best shot with the first offer or miss out. This also means that buyers may have a harder time finding the right home in this market. With fewer homes to choose from, finding the perfect house is going to be more difficult. It is also important in this market for buyers to have all of their Ducks in order. Having a lender letter readily available to present with an offer is essential. 

Last but certainly not least, it is essential that you have a strong professional Real Estate agent working for you. Without having a Trusted Advisor who knows your needs and wants and who can search the market for you, your chances of finding a great home at a good price are going to be tough in this market. 

We find great homes for our buyers every day. Just because we are entering a sellers market does not mean that purchasing a home needs to be frustrating. A sellers market just means that if you are wanting to purchase a home, you need to be on top of things and have a strong agent who knows the market working for you!

If you have any questions, or just want a strong professional working for you...give me a call...I'm here to help!

 

Investing in Real Estate

by Eric Butler

Investing in Real Estate

Today's low interest rates and stabilized home prices have created some great investment opportunities!  Investing in real estate has unique advantages over other types of investments:

Interest in mortgage loans are tax-deductible.  Investors can lower their tax liability while increasing their equity.

Renters pay down your mortgage loan.  Investors reap the benefits of rental income, which offsets your mortgage cost and build equity.

Real Estate values increase over the long term.  Real Estate is limited and will always be in demand.

1031 exchanges are available to defer taxable income when you are ready to sell.

Many investors are taking advantage of these great market conditions. Have questions? Give me a call. I’m  happy to help!

Should I Buy a Home Now?

by Eric Butler

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Displaying blog entries 1-6 of 6

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Eric Butler
Century 21 Sterling Realty
158 Crimson Circle
Martinsburg WV 25403
304-261-8255 (Cell)
304-263-2121 (Office)
Fax: 304-263-3775 (Fax)