If you’re trying to decide whether or not to sell your house, recent headlines about home prices may be top of mind. And if those stories have you wondering what that means for your home’s value, here’s what you really need to know.

What’s Really Happening with Home Prices?

It’s possible you’ve seen news stories mentioning a drop in home values or home price depreciation, but it’s important to remember those headlines are designed to make a big impression in just a few words. But what headlines aren’t always great at is painting the full picture.

While home prices are down slightly month-over-month in some markets, it’s also true that home values are up nationally on a year-over-year basis. The graph below uses the latest data from S&P Case-Shiller to help tell the story of what’s actually happening in the housing market today:

As the graph shows, it’s true home price growth has moderated in recent months (shown in green) as buyer demand has pulled back in response to higher mortgage rates. This is what the headlines are drawing attention to today.

But what’s important to notice is the bigger, longer-term picture. While home price growth is moderating month-over-month, the percent of appreciation year-over-year is still well above the home price change we saw during more normal years in the market.

The bars for January 2019 through mid-2020 show home price appreciation around 3-4% a year was more typical (see bars for January 2019 through mid-2020). But even the latest data for this year shows prices have still climbed by roughly 10% over last year.

What Does This Mean for Your Home’s Equity?

While you may not be able to capitalize on the 20% appreciation we saw in early 2022, in most markets your home’s value, on average, is up 10% over last year – and a 10% gain is still dramatic compared to a more normal level of appreciation (3-4%).

The big takeaway? Don’t let the headlines get in the way of your plans to sell. Over the past two years alone, you’ve likely gained a substantial amount of equity in your home as home prices climbed. Even though home price moderation will vary by market moving forward, you can still use the boost your equity got to help power your move.

As Mark Fleming, Chief Economist at First American, says:

“Potential home sellers gained significant amounts of equity over the pandemic, so even as affordability-constrained buyer demand spurs price declines in some markets, potential sellers are unlikely to lose all that they have gained.”

Bottom Line

If you have questions about home prices or how much equity you have in your current home, let’s connect so you have an expert’s advice.

In a market that’s shifting as fast as it is today, many homeowners wonder what, if anything, needs to be renovated before they sell their house. That’s where a trusted real estate professional comes in. They can help you think through today’s market conditions and how they impact what you should – and shouldn’t – do before selling your house.

Here are some considerations a professional will guide you through.

What You Need To Know About Your Local Market

Since the supply of homes for sale has increased so much this year, today’s buyers have more options than they had last year. That may mean you’re not able to ignore some of those repairs or cosmetic updates you could have skipped in previous months. As a recent 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.”

The key word here is selective. Since it’s still a sellers’ market, focusing on a few key areas may be enough to make your house stand out from other options. And since inventory is still low overall, it’s also possible buyers may be willing to handle the renovations themselves once they move in. It all depends on buyer demand and the available inventory in your local area. For advice on what’s happening in your market and what to do to make your house show well, lean on a professional.

Not All Renovation Projects Are Equal

In addition to making sure your house makes a good first impression, you’ll also want to consider the return on your investment (ROI) for any renovations. According to the 2022 Remodeling Impact Report from the National Association of Realtors (NAR), here are the projects that could net you the best return when you sell your house (see visual below):

Again, your real estate advisor is your best resource. When your agent comes to your house for a walk-thru and consultation, they’ll use their expertise to offer any insight into what you may need to repair, replace, or refinish. They also know what other sellers are doing before listing their homes and how buyers are reacting to those upgrades to help steer you in the right direction. As Dr. Jessica Lautz, Vice President of Demographics and Behavioral Insights for NAR, explains:

“This year, the winner was hardwood flooring. Hardwood floor refinishing and putting in new wood flooring had the most significant value, . . .”

How To Draw Buyer Attention to the Upgrades You’ve Made

For any projects you’ve already completed or for those you plan to do before listing, make sure your real estate professional knows. They’re not just an advisor to help you decide where to focus your efforts, they’re also skilled at highlighting any upgrades in your listing. That way, potential buyers know about the features that may help sell them on the house.

No matter what, contact a local real estate professional for expert advice on what work needs to be done and how to make it as appealing as possible to future buyers. Every home is different, so a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.

Bottom Line

In today’s shifting market, it’s important to spend your time and money wisely when you’re getting ready to move. Let’s connect to find out where to focus your efforts before you sell.

If you’re thinking about buying a home, you likely have a lot of factors on your mind. You’re weighing your own needs against higher mortgage rates, today’s home prices, and more to try to decide if you want to jump into the market. While some buyers may wait things out, there’s a reason serious buyers are making moves right now, and that’s the growing number of homes for sale.

So far this year, housing inventory has been increasing and that’s making the prospect of finding your dream home less difficult. While there are always reasons you could delay making a big decision, there are also always reasons to consider moving forward. And having a growing number of options for your home search may be exactly what you needed to feel more confident in making a move.

What’s Causing Housing Inventory To Grow?

As new data comes out, we're getting an updated picture of why housing supply is increasing so much this year. As Bill McBride, Author of Calculated Risk, explains:

“We are seeing a significant change in inventory, but no pickup in new listings. Most of the increase in inventory so far has been due to softer demand - likely because of higher mortgage rates.”

Basically, the inventory growth is primarily from homes staying on the market a bit longer (known as active listings). And that’s happening because higher mortgage rates and home prices have helped moderate the peak frenzy of buyer demand.

The graph below uses data from realtor.com to show how much active listings have risen over the past five months as a result (shown in green):

Why This Growth Is Good News for You

Regardless of the source, the increase in available housing supply is good for buyers. More housing supply actively for sale means you have more options as your search for your next home. A recent article from realtor.com explains just how significant the inventory growth has been and why it’s good news for your plans to buy:

“Nationally, the inventory of homes actively for sale on a typical day in July increased by 30.7% over the past year, the largest increase in inventory in the data history and higher than last month’s growth rate of 18.7% which was itself record-breaking. This amounted to 176,000 more homes actively for sale on a typical day in July compared to the previous year and more choice for buyers who are still looking for a new home.”

The growth this year is certainly good news for you, especially if you’ve had trouble finding a home that meets your needs. If you start your search today, those additional options should make it less difficult to find a home than it would have been over the past two years.

Bottom Line

If you’re ready to jump into the market and take advantage of the increasing supply of homes for sale, let’s connect today. The opportunity is knocking, will you answer?

Some Highlights

• The housing market is moving away from the frenzy of the past year and it’s opening doors for you if you’re thinking about buying a home.
• Housing inventory is increasing, which means more options for your search. Plus, the intensity of bidding wars may ease as buyer demand moderates, leading to fewer homes selling above asking price.
• If you’re ready to buy a home, now may be the moment you’ve been waiting for. Let’s connect to start the homebuying process today.

In today’s housing market, the number of homes for sale is much lower than the strong buyer demand. As a result, homeowners ready to sell have a significant advantage. Here are three ways today’s low inventory will set you up for a win when you sell this season.

1. Higher Prices

With so many more buyers in the market than homes available for sale, homebuyers are frequently getting into bidding wars for the houses they want to purchase. According to the latest data from the National Association of Realtors (NAR), homes are receiving an average of 3.7 offers in today’s market. This buyer competition drives home prices up. As a seller, this certainly works to your advantage, potentially netting you more for your house when you close the deal.

2. Greater Return on Your Investment

Rising prices mean homes are also gaining value, which increases the equity you have in your home. In the latest Homeowner Equity Insights Report, CoreLogic explains:

“In the second quarter of 2021, the average homeowner gained approximately $51,500 in equity during the past year.”

This year-over-year growth in equity gives you the ability to sell your house and then put that money toward a down payment on your next home, or to keep it as extra savings.

3. Better Terms

In a sellers’ market like we have today, you’re in the driver’s seat if you make a move. You have the power to sell on your terms, and buyers are more likely to work with you if it means they can finally land their dream home.

So, is low housing inventory a big deal?

Yes, especially if you want to sell on your terms. Moving now while inventory is so low is key to maximizing your opportunities.

Bottom Line

If you’re interested in taking advantage of the current sellers’ market, let’s connect today to determine your best move.

An important metric in today’s residential real estate market is the number of homes available for sale. The shortage of available housing inventory is the major reason for the double-digit price appreciation we’ve seen in each of the last two years. It’s the reason many would-be purchasers are frustrated with the bidding wars over the homes that are available. However, signs of relief are finally appearing.

According to data from realtor.com, active listings have increased over the last four months. They define active listings as:

“The active listing count tracks the number of for sale properties on the market, excluding pending listings where a pending status is available. This is a snapshot measure of how many active listings can be expected on any given day of the specified month.”

What normally happens throughout the year?

Historically, housing inventory increases throughout the summer months, starts to tail off in the fall, and then drops significantly over the winter. The graph below shows this trend along with the month active listings peaked in 2017, 2018, and 2019.

What happened last year?

Last year, the trend was different. Historical seasonality wasn’t repeated in 2020 since many homeowners held off on putting their houses up for sale because of the pandemic (see graph below). In 2020, active listings peaked in April, and then fell off dramatically for the remainder of the year.

What’s happening this year?

Due to the decline of active listings in 2020, 2021 began with record-low housing inventory counts. However, we’ve been building inventory over the last several months as more listings come to the market (see graph below):There are three main reasons we may see listings continue to increase throughout this fall and into the winter.

1. Pent-up selling demand – Homeowners may be more comfortable putting their homes on the market as more and more Americans get vaccinated.
2. New construction is starting to take off – Though new construction is not included in the realtor.com numbers, as more new homes are built, there will be more options for current homeowners to consider when they sell. The lack of options has slowed many potential sellers in the past.
3. The end of forbearance will create some new listings – Most experts believe the end of the forbearance program will not lead to a wave of foreclosures for several reasons. The main reason is the level of equity homeowners currently have in their homes. Many homeowners will be able to sell their homes instead of going to foreclosure, which will lead to some additional listings on the market.

Bottom Line

If you’re in the market to buy a home, stick with it. There are new listings becoming available every day. If you’re thinking of selling your house, you may want to list your home before this additional competition comes to market.

The real estate market is expected to do very well in 2021, with mortgage rates that are hovering at historic lows and forecasted by experts to remain favorable throughout the year. One challenge to the housing industry, however, is the lack of homes available for sale today. Last week, the National Association of Realtors (NAR) released their Existing Home Sales Report, which shows that the inventory of homes for sale is currently at an all-time low. The report explains:

“Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019. NAR first began tracking the single-family home supply in 1982.”
(See graph below):

What Does This Mean for You?

If You’re a Buyer:

Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be prepared to make a competitive offer from the start, and know that a shortage in inventory could mean you’ll enter a bidding war. Calculate just how far you’re willing to go to secure a home and lean on your real estate professional as an expert guide along the way. The good news is, more inventory is likely headed to the market soon, Lawrence Yun, Chief Economist at NAR, notes:

"To their credit, homebuilders and construction companies have increased efforts to build, with housing starts hitting an annual rate of near 1.7 million in December, with more focus on single-family homes…However, it will take vigorous new home construction in 2021 and in 2022 to adequately furnish the market to properly meet the demand."

If You’re a Seller:

Realize that, in some ways, you’re in the driver’s seat. When there’s a shortage of an item at the same time there’s a strong demand for it, the seller is in a good position to negotiate the best possible terms. Whether it’s the price, moving date, possible repairs, or anything else, you’ll be able to request more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.

Bottom Line

The housing market will remain strong throughout 2021. Know what that means for you, whether you’re buying, selling, or doing both.