Home Sales Are Surging!

 

Recent national data shows that pending home sales increased for a third straight month in July as record-low mortgage rates continue to fuel housing demand.

The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose 5.9% from June to July. On a year over-year basis, sales were 15.5% higher than a year ago, the largest gain since early 2014.

The V-shape sales recovery is further evidence that the housing market is leading a post-COVID economic recovery. Though both existing home sales and new home sales hit new record highs in August, home inventory remains lean and home prices continue to grow. This may put home ownership out of reach for some buyers.

Locally, the Colorado Association of REALTORS® reported a monthly record of 10,771 single-family home sales in July — a 21 percent increase year-over-year. The state also saw an 8.6 percent jump in new listings, though the number of active listings for single family homes dropped by about 42 percent year-over-year.

New single family home sales also surged in July, supported by a renewed consumer focus on the importance of housing, and rising demand in lower-density markets like suburbs and exurbs.

Census and HUD estimated new home sales in July at $901,000, an approximate 14% gain over June, and the strongest annual rate since the end of 2006. April data showing 570,000 new home sales represents the low point of sales for the current recession. The April rate was 26% lower than the prior peak, pre-recession rate set in January.

The gains for new home sales demonstrate that housing is the leading sector for the economy. Despite double-digit unemployment, new home sales are estimated to be 8% higher for the first seven months of 2020 compared to the first seven months of 2019.

Sales are increasingly coming from homes that have not started construction, with that count up 34% year-over-year. In contrast, sales of completed new homes that are ready for occupancy are down almost 24%. These measures point to continued gains for single-family construction ahead.

Thus far in 2020, new home sales are higher in all regions. Sales on a year-to-date basis are 5% higher in the South, 9% in the West, 20% in the Midwest, and 22% higher in the Northeast.

Whether you’re selling or buying, let’s talk about your best strategies for success in our current market! Give me a call!

Source: Audrey Conklin FOXBusiness, Robert Dietz, www.eyeonhousing.org, Fan-Yu Kuo, www.eyeonhousing.org

Coronavirus Real Estate Myths Debunked

Coronavirus Real Estate Myths Debunked

 

Have you heard that it’s a terrible time to sell a home since real estate prices are plummeting? Or that the coronavirus has forced all city dwellers to flee to the suburbs?

These misguided beliefs can lead to missing out on some profitable opportunities. Let’s compare these myths to reality.

1. It’s a terrible time to sell your home. On the contrary, the latest statistics suggest that now is one of the best times in years to sell a home. According to Danielle Hale,
chief economist at realtor.com, “the data suggests that buyers outnumber sellers in the housing market, which means it’s better to be a seller than a buyer.”

2. Home prices are plummeting. Data shows just the opposite. Home prices are actually rising. According to the National Association of REALTORS (NAR), the national median price for single-family homes grew 7.7% during the first quarter of 2020. “We’re seeing home prices grow faster than pre-COVID-19,” Hale says. “In fact, they are on pace with the home price growth we saw this time last year.” The reason is record low mortgage rates which boost buying power.

3. Buyers are holding off on home purchases. According to the NAR, pending home sales jumped 44.3% in May, the largest month-over-month increase since the index’s inception in 2001. Buyer demand is being fueled by low interest rates which dipped below 3% for the first time in 50 years to 2.98% in July.

4. Everyone’s fleeing cities for the suburbs. While this rampant myth makes sense from an impulse level, it is only partly accurate. Data has shown that listings in the suburbs are drawing more attention. In May, the number of views on properties with suburban ZIP codes increased 13%, almost double those in urban areas, according to realtor.com.
That doesn’t mean everyone is fleeing to the suburbs, though. Many of those people surfing suburban real estate listings might fantasize about moving, but when it comes to making an offer on a house and packing up their belongings, many may prefer to stay put and see how the pandemic shakes out.

5. Homes can’t be viewed in person. Stay-at-home orders and social distancing mandates put a hold on in-person home showings and open houses. Now, these restrictions are being lifted in many areas of the country so homes can be viewed in person with extra safety measures in place.

As an added precaution and to eliminate non-serious buyers, in some areas potential buyers are required to have pre-approval letters before they can see a home in person.

In areas where infection rates begin to rise, restrictions on home showings may be reinstated. Give me a call to discuss current guidelines in our local market.
Source: realtor.com

Summer Home-Buying Season May Be Much Hotter Than Expected

Summer Home-Buying

Summer home-buying season may be much hotter than expected!

Until recently, the prognosis for the housing market wasn’t great. With the economy in a free fall, some home sellers took down their “For Sale” signs and some buyers chose to wait out the pandemic. It was like the pause button was pushed on the normally bustling spring home-buying season.

But as states reopen their economies, the summer real estate market just might turn out to be hotter than anticipated. According to the Mortgage Bankers Association,
mortgage applications in May for home purchases increased compared to May 2019, rising an impressive 8.7% as buyers raced to lock in record-low mortgage rates.

Danielle Hale, Chief Economist for realtor.com, says “It’s a sign that we are going to see a delayed seasonal bump in home sales. There’s pent-up demand from people who
weren’t able to get out in the early part of the spring.”

“The pandemic really hit us right at the time when home-buying activity really ramps up,” says Joel Kan, economist for the Mortgage Bankers Association. That’s resulted in “a late home-buying season.”

The recovery may be due in part to more sellers listing their homes as cities and states loosen restrictions.

And, low mortgage rates are enticing buyers back into the market according to Lawrence Yun, chief economist of the National Association of Realtors®.

Plus, there is still a severe housing shortage, which has only gotten worse during the public health crisis. Sellers have pulled their properties off the market or are delaying listing until the virus is under control. That can make it tough for buyers to find the right properties.

“Buyers may be surprised by how competitive the market is,” says Hale.

This could result in higher prices this summer, as there could be more folks competing for homes than homes for sale. “Given the strength of this recovery, home prices will probably rise about 4% to 6% in 2020,” predicts NAR’s Yun.

If the coronavirus resurges in the fall and the economy continues to falter, prices could flatten or even dip a tiny bit by the end of the year. They’re not likely to plunge like
they did during the Great Recession, though, as demand is simply too high.

“We have so many millennials who are at ages when they want to settle down and they want to buy a home, and that really helps keep the market busy,” says Hale.

Give me a call when you’re considering your next home sale or purchase! https://ftcollinshomes.com/contact-us/

Source: Clare Trapasso, Senior News Editor of realtor.com®

How Covid-19 Is Changing The Real Estate Landscape

Real estate sales are continuing during the pandemic.

As stay-at home orders keep more Americans physically distant, the real estate industry is rushing to find ways to show properties for
those wanting to pursue a home purchase.

The use of online virtual tours has quickly increased and in some areas, agents are conducting private video showings.

Virtual tools give buyers a feel for homes — and are leading to offers.

A quarter of REALTORS® recently surveyed by the National Association of REALTORS® reported that their clients put contracts on homes without physically seeing the property.

Buyers who are looking for a home are being very decisive and acting quickly.

While offers are continuing for now — albeit in different ways — the real estate industry warns a slowdown is inevitable while the economy is shut down.

“Expect second-quarter home sales activity to slow down with the broad observance of stay-at-home orders, but sales will pick up when the economy reopens as many potential home buyers and
sellers indicate they’re still in the market or will be in a couple of months,” says NAR’s Chief Economist Lawrence Yun. “Home price remain stable as deals continue to happen with the growing use of new technology tools.” Yun further commented that as of mid- April, 10% of REALTORS® reported the same level or more business activity following the economic lockdown.

The April survey indicated that one-third of REALTORS® reported no closing delays from the COVID-19 outbreak. For those who did report delays, the top reasons cited were delays due to financing,
appraisals, and home inspections.

The entire home buying process is being adapted. A home inspector may be on the premises alone and video chat with buyers and their agents to review the inspection assessment. Some appraisals are being completed without a physical visit to the property.

The final walkthrough prior to closing may be conducted via video, or by allowing buyers to walk through on their own. Buyers are advised not to touch anything, maintain a distance of at least six feet from one another, and wash their hands when entering and exiting the house.

Here is an overview of recent changes occurring in the real industry:
• Increased use of virtual tours of listings
• Virtual showings
• Earnest money paid by wire transfer
• Virtual inspections with electronic delivery of reports
• Increased use of exterior only appraisals
• Electronic signing of contract and closing documents
• Drive through closings
• Remote Notary

Let’s talk about your options for buying or selling your home in the current market!
Source: National Association of REALTORS, REALTOR Magazine

Buying a Home Young is the Key to Building Wealth

Buying a Home Young is the Key to Building Wealth

Homeowners who purchase their homes before the age of 35
are better prepared for retirement at age 60, according to a
new Urban Institute study. The organization surveyed adults
who turned 60 or 61 between 2003 and 2015 for their data
set.

“Today’s older adults became homeowners at a younger age than
today’s young adults. Half the older adults in our sample bought
their first house when they were between 25 and 34 years old, and
27 percent bought their first home before age 25.”

The study goes on to show the impact of purchasing a home
at an early age. Those who purchased their first homes when
they were younger than 25 had an average of $10,000 left on
their mortgage at age 60. The 50% of buyers who purchased
in their mid-twenties and early-30s had close to $50,000
left, but traditionally had purchased more expensive homes.

Many housing experts are concerned that the
homeownership rate amongst millennials, those 18-34, is
much lower than previous generations in the same age range.
The study results gave a great reason why this generation
should consider buying instead of signing a renewal on their
lease:

“As people age into retirement, they rely more heavily on
their wealth rather than their income to support their
lifestyles. Today’s young adults are failing to build housing
wealth, the largest single source of wealth, at the same rate as
previous generations.

While people make the choice to own or rent that suits them at a
given point, maybe more young adults should take into account the
long-term consequences of renting when home ownership is an
option.”

Bottom Line
If you are one of the many young people debating whether buying
a home this year is right for you, or you know a young person who
can benefit from buying their first home, contact me to explore
available options!

Source: Keeping Current Matters

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