In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their homes on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.
Here are the top five reasons:
1. Exposure to Prospective Buyers
Recent studies have shown that 94% of buyers search online for a home. That is in comparison to only 16% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
2. Results Come from the Internet
Where did buyers find the homes they actually purchased?
The National Association of REALTORS® surveyed their members for their monthly Confidence Index.
The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions.
Homes sold in less than a month in 24 out of 50 states, and Washington D.C.
Homes typically went under contract in 27 days in May!
The Joint Center of Housing Studies (JCHS) at Harvard University recently released their 2017 State of the Nation’s Housing Study, and a recent blog from JCHS revealed some of the more surprising aspects of the study.
The first two revelations centered around the shortage of housing inventory currently available in both existing homes and new construction.
Regarding Existing Home Inventory:
“For the fourth year in a row, the inventory of homes for sale across the US not only failed to recover, but dropped yet again. At the end of 2016 there were historically low 1.65 million homes for sale nationwide, which at the current sales rate was just 3.6 months of supply – almost half of the 6.0 months level that is considered a balanced market.”
Interest rates have hovered around 4% for the majority of 2017, which has given many buyers relief from rising home prices and has helped with affordability. Experts predict that rates will increase by the end of 2017 and will be about three-quarters of a percentage point higher, at 4.5%, by the end of 2018.
Last week’s Freddie Mac Primary Mortgage Market Survey revealed that interest rates for a 30-year fixed rate mortgage have fallen to their lowest mark this year, at 3.88%. This is great news for homebuyers looking to purchase and homeowners looking to refinance.
The rate you secure greatly impacts your monthly mortgage payment and the amount you will ultimately pay for your home.
Let’s take a look at a historical view of interest rates
Forbes.com recently released the latest results of their American Dream Index, in which they measure “the prosperity of the middle class, and…examine which states best support the American Dream.”
The monthly index measures several different economic factors, including goods-producing employment, personal and commercial bankruptcies, building permits, startup activity, unemployment insurance claims, labor force participation, and layoffs.
The national index score was rounded out to 100.0 in January as a baseline for comparison and it rose the fourth straight month in a row to 101.8.
Alaska, coming in at 89.4, represented the lowest score on the index due in part to the recent collapse in oil prices. In contrast, Wyoming came in with the
We all realize that the best time to sell anything is when demand is high and the supply of that item is limited. Two major reports issued by the National Association of Realtors (NAR) revealed information that suggests that now continues to be a great time to sell your house.
Let’s look at the data covered in the latest REALTORS® Confidence Index and Existing Home Sales Report.
REALTORS® CONFIDENCE INDEX
Every month, NAR surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions.” This month, the index showed (again) that home-buying demand continued to outpace supply in May.
The map below illustrates buyer demand broken down by state (the darker your state, the stronger the demand
Existing Home Sales reached their third highest mark this year in May.
Inventory of homes for sale has dropped 8.4% since last year, marking the 24th consecutive month of year-over-year declines.
NAR’s Chief Economist, Lawrence Yun had this to say: “Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”
The National Association of Realtors (NAR) recently released the findings of their Q2 Homeownership Opportunities and Market Experience (HOME) Survey. The report covers core topics like, “if now is a good time to buy or sell a home, the perception of home price changes, perceived ability to qualify for a mortgage, and [an] outlook on the U.S. economy.”
The survey revealed that 75% of homeowners think now is a good time to sell, compared to 70% last quarter. This is a considerable increase from more than a year ago when 66% agreed.
Even though homeowners believe that now is a good time to sell, many have not taken the step to list their homes, as inventory shortages still exist across the country. Lawrence Yun, NAR’s Chief Economist, had this to
We previously reported how a shortage of inventory in the starter and trade-up home markets is driving prices up and causing bidding wars, creating a true seller’s market. At the same time, in the premium home market, an over-abundance of inventory has started to see prices come down and put buyers in the driver’s seat, creating the beginning of a buyer’s market.
Last week, the National Association of Realtors released their Existing Home Sales Report which shed some additional light on the impact of inventory levels on sales in each price range.
The chart below shows the year-over-year difference in sales at each price range.
The under $100K range has shown declines in recent years due to the shortage of distressed homes available for
In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.
Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach.
Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:
“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you