Real Estate Information
Tampa Bay Real Estate Blog
Gary and Nikki Ubaldini
Displaying blog entries 1-10 of 84
If you thought about selling your house this year, now may be the time to do it. The inventory of homes for sale is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market.
Jonathan Smoke, Chief Economist at realtor.com, revealed in a recent article that:
“The biggest challenge to buyers this spring will be simply finding a home to buy and getting it successfully under contract. That’s because the supply of homes for sale is at an all-time low, and yet demand is strong and getting stronger.”
Smoke goes on to say:
“We started the year with the lowest inventory of homes available for sale that we’ve ever seen on realtor.com. While we did see inventory grow 2% in February, total inventory was down 11% over last year.”
In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction including the inspection, appraisal and financing contingencies.
As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.
The media has extensively covered the rise in mortgage interest rates since last fall (from 3.42% last September to the current 4.1% according to Freddie Mac). However, a less covered aspect of the mortgage market is that requirements to get a mortgage have eased while rates have risen.
The Mortgage Bankers Association (MBA) quantifies the availability of mortgage credit each month with their Mortgage Credit Availability Index (MCAI). According to the MBA, the MCAI is:
“A summary measure which indicates the availability of mortgage credit at a point in time.”
The higher the index, the easier it is to get a mortgage. Here is a chart showing the MCAI over the last several months as rates have increased.
Have requirements for attaining a mortgage actually eased?
Yes. Here are two examples:
- FICO® Score – the credit score which helps determine a buyer’s eligibility. The score required to attain a mortgage has been falling over the last five months:
- Down Payment Requirement – the percentage of the purchase price necessary to place as a down payment on a home. To make this point, let’s look at the percentage of first-time buyers who have put less than 5% down over the last several years as compared to the 1stquarter of 2017:
Whether you are a current homeowner looking to move to a home that will better serve your family’s current needs, or a first-time buyer looking for a starter home, it is easier to get a mortgage today than it has been at any other time in the last ten years.
Traditionally, spring is the busiest season for real estate. Buyers come out in force and homeowners list their houses for sale hoping to capitalize on buyer activity. This year will be no different!
Buyers have already been out in force looking for their dream homes and more are on their way, but the challenge is that the inventory of homes for sale has not kept up with demand, which has lead to A LOT of competition for the homes that are available.
A recent Bloomberg article touched on the current market conditions:
“It’s the 2017 U.S. spring home-selling season, and listings are scarcer than they’ve ever been. Bidding wars common in perennially hot markets like the San Francisco Bay area, Denver and Boston are now also prevalent in the once slow-and-steady heartland, sending prices higher and sparking desperation among buyers across the country.”
Sam Khater, Deputy Chief Economist at CoreLogic went on to explain why buyers are flocking to the market in big numbers:
“In today’s market, many buyers think the trough in [interest] rates is over. If you don’t get in now, it’s just going to be worse later. Rates will be higher, prices will be higher, and maybe inventory selection will be lower.”
In some markets, “thirty-five percent of properties are selling within the first week or two of hitting the market.” Homes are selling at a rapid clip in places like:
- Denver, CO
- Seattle, WA
- Oakland, CA
- Grand Rapids, MI
- Boise, ID
- Madison, WI
- Omaha, NE
Let’s get together to discuss your exact market conditions and help you create a strategy to secure your new home in this competitive atmosphere!
Get a free, INSTANT home valuation. Click below.
Thinking of selling your home?
According to the Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, the U.S. housing market has continued to move deeper into buy territory, supporting the belief that housing markets across the country remain a sound investment.
The BH&J Index is a quarterly report that attempts to answer the question:
In today’s housing market, is it better to rent or buy a home?
The index examines the entire US housing market and then isolates 23 major cities for comparison. The researchers “measure the relationship between purchasing property and building wealth through a buildup in equity versus renting a comparable property and investing in a portfolio of stocks and bonds.”
While most of the metropolitan markets examined moved further into buy territory (16 of the 23), markets like Dallas, Denver, and Houston are currently deep into rent territory. In these three markets, it is estimated that renting will top homeownership 7 out of 10 times.
Due to a lack of inventory, the home prices in the Dallas, Denver, and Houston areas have increased by 11.6%, 8.3%, and 6.6% respectively. Home prices in these areas will begin to return to more normal levels once residents realize that renting is not the best option, therefore bringing home affordability back as well.
The majority of the country is strongly in buy territory. Buying a home makes sense socially and financially, as rents are predicted to increase substantially in the next year. Protect yourself from rising rents by locking in your housing cost with a mortgage payment now.
To Find Out More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.