Median home sale prices have been increasing for the past few years now and they reached another all-time high. It is evident that much of this has been due to a simple equation of low supply with greater demand. However, what effects are there on a micro level within a specific real estate market? What factors drive the price of a particular home in a particular location?
An appraiser informs that pricing is based on three factors: location, product and timing. Product and location are in large part connected where it can be a great home in the great neighborhood. Timing is more of a sliding variable that can have to do with what the local competing inventory is at that given time.
How Appraisers Determine Value
Appraisers will approach the value of a home starting with a physical inspection of the home’s structural elements. This includes items such as roof, HVAC system, bathrooms, kitchen and the general conditio. The appraiser will then factor in location and neighborhood which will include researching the comps and adjusting the price based on comparing your home to those.
Home Features Currently in demand
These items can have a significant impact on the price. Granite counters used to be a highly sought after item, but today they are considered standard. Design trends are indicating that interior colors have switched from beige and brown to more of shades of gray. These trends along with other preferences can vary regionally including having a pool or a second story which may or may not add value.
How a Seller can add Value
One aspect that is universal is to have your home in excellent condition when listing it on the real estate market for sale. If you have been deferring some repairs or improvements then taking care of them beforehand is always best. Buyers often pass on a home if there are obvious signs of disrepair. Additionally, these more significant repairs will certainly be found in a home inspection anyway. Finally, be sure that your home’s exterior is looking outstanding. Your home’s curb appeal is very important being the first and last thing that every buyer will see.
Traps to Avoid
In markets like the current one, there can be multiple offers and bidding wars. When this happens, the purchase becomes more emotional than practical. Don’t lose sight of the property’s true market value and replace it with your own. Additionally, if you are planning on securing a loan then your home will need to appraise accordingly otherwise the deal will fall through.
The Mendosa-Balboni Team knows that the purchase of luxury real estate is driven by different factors for different people and at any given time there will always be some who are in pursuit of finding a home to buy regardless of market conditions.
There has been an increasing demand recently for luxury property among younger crowds. As their disposable income is on the rise the desire for higher living standards has followed suit. No longer is a basic home of interest. Now a luxury home with more amenities and comforts become part of the wish list in a home. Here are four reasons why now is a great time to purchase a luxury property.
Low Rates – Despite expectations of rates increasing, they are still very low. The lower your loan rate, the lower your new home mortgage payment will be. This all plays a part in your overall budget for a new home.
Rents are on the rise – Some real estate market reports have indicated that luxury rentals will rise at a minimum of 3% per year. With this being the case, it makes for a compelling reason to make your purchase even sooner. As mortgage rates are at all-time lows, it can often be cheaper on a monthly basis to pay a mortgage than to pay a hefty rent.
Begin building equity – Renters are spending thousand of dollars on rent per year that they will never see again. Stop paying your landlord’s mortgage and start paying your own. The sooner you purchase your home, the sooner you will begin building equity in your home. As many people get a 30 year loan product for a mortgage, don’t waste anymore time so you can be in a better financial position as you near retirement.
Affordable Insurance – Mortgage insurance premiums are less expensive right now which also helps purchase a luxury home. Purchase a luxury property now while the mortgage odds are more in your favor rather than waiting until house prices and interest rates may also increase. With a more expensive home purchase it may be more challenging to come up with 20% for a downpayment to avoid PMI.
The close of the summer real estate market showed a slower pace that had continued for a few consecutive months in a row. The reason for a slowdown in pending sales is due to challenges of limited housing stock available for purchase across the United States. Natural disasters including both hurricanes Harvey and Irma also add further dips in the pace that had been forecasted for 2017 according to the National Association of Realtors.
The National Association of Realtors’ pending home sales index has retracted by 2.6 percent to 106.3 in August from 109.1 in July. This is also 2.6 percent lower than last year and the lowest since January of 2016.
Lawrence Yun, NAR chief economist, says this summer’s terribly low supply levels have officially drained all of the housing market’s momentum over the past year. “August was another month of declining contract activity because of the one-two punch of limited listings and home prices rising far above incomes,” he said. “Demand continues to overwhelm supply in most of the country, and as a result, many would-be buyers from earlier in the year are still in the market for a home, while others have perhaps decided to temporarily postpone their search.”
The U.S. real estate market does not anticipate having a significant boost in inventory to help boost sales. Further complications for improvement include both hurricanes Harvey and Irma which will likely continue to provide a temporary dip in activity for the southern regions that were affected.
The adjusted prediction for existing home sales for 2017 is now expected to be around 5.44 million which is only 0.2% lower than the pace we saw in 2016. Sales prices, however, are expected to increase by 6% for this year.
“The supply and affordability headwinds would have likely held sales growth just a tad above last year, but coupled with the temporary effects from Hurricanes Harvey and Irma, sales in 2017 now appear will fall slightly below last year,” said Yun. “The good news is that nearly all of the missed closings for the remainder of the year will likely show up in 2018, with existing sales forecast to rise 6.9 percent.”
Preparing your home for sale can be a very stressful time as you get ready for your life’s next chapter. You will want to be sure that you cover the basics by decluttering, deep cleaning and staging your home. However, it is possible to do too much with your home. Here is some advice on things to avoid when you list your home for sale.
Do not over-improve
To get top dollar it is important that your home be updated with things like flooring, modern appliances and fixing any glaring repairs that are necessary. However, there is a point when you don’t want to overdo it. For example, you might not want to install a wall of built-in floor to ceiling bookcases in a bedroom to create the perfect in-home office. There is a very good chance that potential buyers may need to make that a fully functioning bedroom for their family members.
Don’t hang around
When your agent alerts you of a showing that is scheduled, make sure to leave the home for that time. This goes for all of your family members, including the dog. If you can’t make arrangements to go too far, you can even go for a walk to let prospective buyers feel at home while they try to envision themselves living there.
Do not over-decorate
Adding too much can be overdoing it when it comes to decorating. When designing your home’s decor, keep things neutral where they warm up the space, but are not too dramatic or specific for anyone’s taste or style.
Don’t take offense
Don’t forget, the purchase of a home is business. Although emotions get involved sometimes, try not to take things too personally. When a prospective buyer submits a low offer or claims that they will need to redo the master bathroom that is more your taste than theirs, don’t let this bother you while you negotiate.
As your trusted real estate resource, the Mendosa Balboni team has their finger on the pulse for current trends. This summer buyer demand has remained strong as it forced properties to go under agreement in less than a month for the 4th month in a row this past July. Both gains and dips were seen with sales across the nation this summer due to the limited housing stock, but in the end there was a slight dip in the numbers.
The total number of existing and completed home sale transactions had shown a slight decrease by 1.3% in July. However, this sales trend was still 2.1% higher than this time last year in 2016.
Lawrence Yun, NAR chief economist, says the second half of the year got off on a somewhat sour note as existing sales in July inched backward. “Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” he said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”
Regarding home prices, the median price for homes in July was up by 6.2% over last year. This has been the 65th month in a row of year-over-year gains. Meanwhile, housing inventory has steadily declined for the past 26 year-over-year consecutive months which has led to the current state.
“Home prices are still rising above incomes and way too fast in many markets,” said Yun. “Realtors® continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”
The low level of inventory is the chief reason that most homes are not spending many days on the market lately. In July, 51% of the homes that sold that month were on the market for less than 30 days.
“July was the fourth consecutive month that the typical listing went under contract in under one month,” said Yun. “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest. The frustrating inability for new home construction to pick up means inadequate supply levels will keep markets competitive heading into the fall.”
In numerous markets across the United States the fall market is traditionally an active market where sales can peak much like spring. It is anticipated that housing levels should increase as sellers look to take advantage of the busy season.
If you have plans to move into a new home in the near future then you probably have many things to do from packing to scheduling movers. However, one of the best bits of advice is to set time aside and make a floor plan of your new home. Regardless of if you are bringing furniture that you already own or if you are buying additional pieces, planning out the rooms will give you peace of mind while making sure everything fits well.
Take Measurements – A good place to begin is to take measurements of everything that you can. Some listings, especially if they are newer construction, can even have floor plans available that you can utilize which will save you a lot of time. Most floor plans should be fairly accurate, but the scale is not always 100% exact. Be sure to not only measure the size of the rooms, but also the width of doorways and stairwells.
Consider Function – When you map out each room, make sure you keep function and flow in mind. Try to picture the room with several people in it. Then, figure where your furniture should be placed so that it can be functional without interrupting the flow of the room. Sometimes it can be helpful to work with others to get different perspectives and ideas.
Use Online Tools – If there is not already a floor plan and you need to create one, try using a free online service like Floorplanner.com. A system like this is an easy solution for drawing a floor plan and it even offers objects that you can place in rooms to represent your furniture.
Welcome Changes – It is important to understand that as much planning you do for your home online, it is not going to be the same as when you actually move in. Be ready and open to make some changes once your belongings are all moved in. You may even want to live in it for a while to see how the setup can work best.
Planning ahead by creating a floor plan should assist in relieving stress, see what you have and what is needed. This can also very helpful to instruct your movers on where to place your furniture on moving day.
The Mendosa-Balboni Team can tell you best as being busy Realtors, that making a home office space that is inspiring and organized can definitely help with your productivity. If you currently have just a portion of a counter, simple desk with plain chair or the like, now is a good time to take some time and consider a facelift. Here are some great ideas that will help inspire you throughout the day while you enhance an important part of your home.
Add life – Working in an area that isn’t lively makes it hard to feel alive and inspired. While you certainly don’t want to add too much for distraction, add some plants for life and color. Any plants that are appropriate for the amount of natural light in your home can do. However, succulents are always great options as they are extremely hardy and don’t require much effort to keep them alive.
Add words of inspiration – There can never be too much inspiration for your workspace. Try adding some key words or phrases that foster creativity and production. Wall stickers are a great and easy solution to tackle this.
Add color – Adding splashes of color for interest but not distraction is key. Too much color can take away from productivity while not enough will leave the area dull and boring. Some ideas can include painting the interior of your bookcase, adding colorful decorative items or swapping out monotone furniture pieces that are more vibrant.
Personal touch – Create a level of comfort while you add exciting decor. Even if you have created the perfect, stunning environment, it can still be dull if you haven’t customized it as yours. Some photos of family, friends, favorite places or things are great ideas.
Relaxing accents – It may sound strange to make a productive space relaxing at first. However, transform any stressful energy into being productive instead. Be sure not to add any elements that may make you drowsy like dim lighting. Some tips include things like candles or even a nice fluffy rug under your feet.
As your real estate resource, the Mendosa-Balboni Team knows the real estate market as well as helpful tips on current home design and trends. We know that one challenge that some have is working with smaller spaces in their homes like a smaller bathroom. If you considering a remodel in the near future for one of your small bathrooms, here are 5 great tips on how to make it appear larger without knocking down walls.
Floating vanity – Looking to save some space under your cabinets? Install a floating vanity that is mounted to the wall. A floating vanity will turn that wasted space into more floor space creating a larger illusion while giving you more room for your feet.
Wall mount faucet – If your sink and counter are already on the small side, you can save a lot of space by moving your faucet to the wall. Moving the faucet to the wall will free up valuable counter space for your other belongings and storage. Visually, this will make the area appear larger.
Wall mounted medicine cabinet – In the interest of keeping your counters clear of too many items, consider mounting a medicine cabinet on the wall for storage. Keep your toiletries and personal items here so they are still easily accessible, but hidden.
Linen storage – If you are lacking on storage space, consider relocating your towels to a hall closet or cabinet nearby. If you wish to keep them in the bathroom, try doing a wall mounted open shelf or utilizing the space under your wall mounted vanity.
Mirrors – Other than being an essential item in the bathroom for getting ready, mirrors always create an illusion of making a smaller space seem larger. Pick a modern and larger mirror for your bathroom for a spacious look. Meshing mirrors with a palette of colors that are lighter will typically make the room appear brighter and more spacious.
As your real estate experts, the Mendosa – Balboni Team would like to share some interesting information about the effects of staging a home. According to a recent survey from the National Association of Realtors, 62% of sellers’ agents shared that staging a home decreases the number of days a home will be actively on the market.
“Realtors® know how important it is for buyers to be able to picture themselves living in a home and, according to NAR’s most recent report, staging a home makes that process much easier for potential buyers,” said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties. “While all real estate is local, and many factors play into what a home is worth and how much buyers are will to pay for it, staging can be the extra step sellers take to help sell their home more quickly and for a higher dollar value.”
The report shared that nearly two-thirds of sellers’ agents think that staging decreased time on the market, with 39% stating it greatly decreases the time and 23% stating it only slightly decreases. Sixteen percent said it either greatly or slightly increases the time on the market while 8% felt it has no impact.
For findings with the buyer audience, 77% of buyers’ agents felt that staging a home makes it much easier to visualize the property, and 40% are more apt to visit a home they first saw staged online. Meanwhile, 38% of buyers’ agents claimed that staging can add value only if staged according to the buyer’s taste. Therefore decorating should be designed to appeal to the largest audience possible.
Realtors that represent both buyers and sellers all agree that the living room is the most important room to be staged. This is followed by the master bedroom, kitchen and outdoor space. The guest room is of least importance.
The majority of buyers’ agents think that staging can increase a home’s dollar value between 1 and 10%. Only 1% of buyer agents felt that staging can have a negative impact on the home’s price. Seller agents believe that staging can add anywhere from 1 to 15% in value while no agents feeling it has a negative impact on price.
The reports of how many agents recommend staging and when they stage were across the board from before listing the home to only when a property proves difficult to sell. However, most agents recommend decluttering the home with a good cleaning and remedying obvious items in need of repair.
Everybody knows that coordinating a relocation into a new home involves many moving parts. Typically your first reaction is to dread the experience, only the good news is it doesn’t have to be such a daunting task. Following tips can make the process go a lot more smooth when you use them as a checklist. If you are fortunate enough to be booking movers then you are in even better shape. Here are 10 tips to help as you plan your move.
Internet – This is often overlooked by many. If you want internet service as soon as you move in, be sure to schedule this far in advance so that you can assure a timely appointment with the service provider.
Electricity – Similar to your internet, yet typically easier. Contact the electric utility service company and alert them that you will be setting up an account in your name as of the day you take ownership.
Hire Movers – Do this far in advance so you have time to collect a few estimates and have a better chance of scheduling them for the dates that you need.
Cleaning – If you have the chance to get into your new home before moving day, give it a thorough and deep cleaning. This is easier to do early on before all of your belongings arrive.
Inspect belongings – Especially if you hired movers, be sure to inspect items after they have been delivered. Make sure everything is intact as you place each box in its correct room.
Stay organized – It is always best if you have items grouped together in labeled boxes. This makes it much easier and streamlined when you unpack. Start unpacking all of the essentials like bedding, clothing and toiletries then tackle secondary items afterwards.
Change the locks – A good idea would be to change the locks after you move in. You never know how many copies were made and who has them so for peace of mind you may want to have them rekeyed.
Locate circuit breaker – Don’t wait until you blow a fuse to find the panel. Locate this ahead of time so there is no extra confusion in the dark when and if you need to access it.
Window treatments – This step typically makes the house feel like a home. Adding some blinds or curtains add function and privacy while they can reflect your personal taste. If you haven’t decided on any right as you move in, use some linen to temporarily provide privacy.
Meet the neighbors – When it comes time to take a break from unpacking, take a walk outside and introduce yourself to the neighbors. Say hello to anyone you see and you will start to feel right at home and part of the community.