Lower Mortgage Rates Are Bringing Buyers Back to the Market

 Article Courtesy of Keeping Current Matters/The KCM Blog

As mortgage rates rose last year, activity in the housing market slowed down. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.

Now, however, rates are beginning to come down—and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before.

So, if you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.

Mike Fratantoni, SVP and Chief Economist, MBA:

“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”

Lawrence Yun, Chief Economist, National Association of Realtors (NAR):

“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”

Thomas LaSalvia, Senior Economist, Moody’s Analytics:

“We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit.”

Sam Khater, Chief Economist, Freddie Mac:

“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”

Bottom Line

If you’ve been thinking about making a move, now’s the time to get your house ready to sell. Contact a local real estate professional to learn about buyer demand in your area and the best time to put your house on the market.

For Sellers, Pricing, Selling Myths Want To Sell Your House? Price It Right.

 Article Courtesy of Keeping Current Matters/The KCM Blog

Last year, the housing market slowed down in response to higher mortgage rates, and that had an impact on home prices. If you’re thinking of selling your house soon, that means you’ll want to adjust your expectations accordingly. As realtor.com explains:

“. . . some of the more prominent pandemic trends have changed, so sellers might wish to adjust accordingly to get the best deal possible.”

In a more moderate market, how you price your house will make a big difference to not only your bottom line, but to how quickly your house could sell. And the reality is, homes priced right are still selling in today’s market.

Why Pricing Your House Appropriately Matters

Especially today, your asking price sends a message to potential buyers.

If it’s priced too low, you may leave money on the table or discourage buyers who may see a lower-than-expected price tag and wonder if that means something is wrong with the home.

If it’s priced too high, you run the risk of deterring buyers. When that happens, you may have to lower the price to try to reignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag by some buyers who will wonder what that means about the home.

To avoid either headache, price it right from the start. A real estate professional knows how to determine that ideal asking price. They balance the value of homes in your neighborhood, current market trends, buyer demand, the condition of your house, and more to find the right price. This helps lead to stronger offers and a greater likelihood your house will sell quickly.

The visual below helps summarize the impact your asking price can have:

Bottom Line

Homes that are priced at current market value are still selling. To make sure you price your house appropriately, maximize your sales potential, and minimize your hassle, reach out to a trusted real estate professional.

 

What’s Really Happening with Home Prices? [INFOGRAPHIC]

 Infographic Courtesy of Keeping Current Matters/The KCM Blog

 

Some Highlights

• If you’re thinking about selling your house, recent headlines about home prices falling month-over-month may have you second guessing your decision—but perspective matters.
• While home prices are down slightly month-over-month in some markets, home values are still up almost 10% nationally on a year-over-year basis. A nearly 10% gain is still dramatic compared to the more normal level of appreciation, which is 3-4%.
• Reach out to a real estate professional to find out how much equity you have in your current home and how you can use it to fuel your next purchase.

Pre-Approval in 2023: What You Need To Know

 Article Courtesy of Keeping Current Matters/The KCM Blog

One of the first steps in your homebuying journey is getting pre-approved. To understand why it’s such an important step, you need to understand what pre-approval is and what it does for you. Business Insider explains:

“In a preapproval [sic], the lender tells you which types of loans you may be eligible to take out, how much you may be approved to borrow, and what your rate could be.”

Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand your options and what you may be able to borrow.

How does it work? As part of the pre-approval process, a lender will look at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. That can make it easier when you set out to search for homes because you’ll know your overall numbers. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.

Pre-Approval Helps Show You’re a Serious Buyer

Another added benefit is pre-approval can help a seller feel more confident in your offer because it shows you’re serious about buying their house. A recent article from Forbes notes:

“From the seller’s perspective, a preapproval [sic] letter from a reputable local lender often can make the difference between accepting and rejecting an offer.”

This goes to show, even though you may not face the intense bidding wars you saw if you tried to buy during the pandemic, pre-approval is still an important part of making a strong offer. In fact, Christy Bieber, Personal Finance Writer at The Motley Fool explains it may be the most important part of making an offer:

“Pre-approval maximizes the chances you’ll be able to actually close the deal – and sellers want to see that.

The fact that a pre-approval gives you a better chance of getting your offer accepted is undoubtedly the most important reason to complete this step . . .”

Bottom Line

Getting pre-approved is an important first step towards buying a home. It lets you know what you can borrow and shows sellers you’re serious about purchasing their home. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase a home in today’s market.

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Have Home Values Hit Bottom?

 Article Courtesy of Keeping Current Matters/The KCM Blog

Whether you’re already a homeowner or you’re looking to become one, the recent headlines about home prices may leave you with more questions than answers. News stories are talking about home prices falling, and that’s raising concerns about a repeat of what happened to prices in the crash in 2008.

One of the questions that’s on many minds, based on those headlines, is: how much will home prices decline? But what you may not realize is expert forecasters aren’t calling for a free fall in prices. In fact, if you look at the latest data, there’s a case to be made that the biggest portion of month-over-month price depreciation nationally may already behind us – and even those numbers weren’t significant declines on the national level. Instead of how far will they drop, the question becomes: have home values hit bottom?

Let’s take a look at the latest data from several reputable industry sources (see chart below):

 

The chart above provides a look at the most recent reports from Case-Shiller, the Federal Housing Finance Agency (FHFA), Black Knight, and CoreLogic. It shows how, on a national scale, home values have changed month-over-month since January 2022. November and December numbers have yet to come out.

Let’s focus in on what the red numbers tell us. The red numbers are the change in home values over the last four months that have been published. And if we isolate the last four months, what the data shows is, in each case, home price depreciation peaked in August.

While that doesn’t guarantee home price depreciation has hit bottom, it confirms prices aren’t in a free fall, and it may be an early signal that the worst is already behind us. As the numbers for November and December are released, data will be able to further validate this national trend.

Bottom Line

Home prices month-over-month have depreciated for the past four months on record, but there’s a strong case to be made that the worst may be behind us. If you have questions about what’s happening with home prices in your local market, reach out to a trusted real estate professional.

 

Gorgeous Home in Beautiful TreeTops

 1479 Tranquility Blvd. / Lancaster, SC 29720

1/24/23 - UNDER CONTRACT

This stunning home sits on a premium lot and offers a serene sanctuary for the most discriminating buyer. The home features an open floor plan with tons of upgrades, including a fabulous gourmet kitchen with custom pull-out drawers, a 5 burner gas range, double electric ovens, granite counters and stainless steel appliances. It also boasts crown moulding throughout, custom lighting, fans and window shades, a large paver patio and fenced backyard, in-ground irrigation, a finished 3-car garage with epoxy flooring, and a cozy custom sunroom with R-30 insulation and upgraded windows and flooring to relax and enjoy the beautiful woods that lie beyond the manicured backyard. This is the one you've been waiting for! Come and live the dream at beautiful TreeTops and enjoy all the great amenities and diverse activities this premier active adult community has to offer!

View all photos HERE.

If you or someone you know is looking for a gorgeous home in TreeTops, give me a call!

LOOKING BACK A COUPLE OF YEARS

I thought it would be interesting to get a perspective on the number of ACTIVE single family listings currently on the market in SCCL compared to 2020 and 2021.  You can always check out the current market by using the UP-TO-DATE STATS FOR SCCL and the TREETOPS tabs at the top of this page.  To give a sense of how things have changed, here's a link to my posting at the beginning of January 2021 showing the YEAR IN REVIEW 2020.  As you'll see, there were as many as 36 ACTIVE single family listings on the market in 2020.  At the lowest point in 2021 and early 2022 the number of ACTIVE listings was in single digits (even hitting none a couple of times).  So, today, with 18 ACTIVE listings, we're just about in the middle of the high and low number of ACTIVE listings.  Of course there's no way of knowing what 2023 will look like, so be sure to check back for updates.

WHAT EXPERTS ARE SAYING ABOUT THE 2023 HOUSING MARKET

Article Courtesy of Keeping Current Matters/The KCM Blog

 

If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market this year. In 2022, the market underwent a major shift as economic uncertainty and higher mortgage rates reduced buyer demand, slowed the pace of home sales, and moderated home prices. But what about 2023?

An article from HousingWire offers this perspective:

“The red-hot housing market of the past 2 ½ years was characterized by sub-three percent mortgage rates, fast-paced bidding wars and record-low inventory. But more recently, market conditions have done an about-face. . . . now is the opportunity for everyone to become re-educated about what a ‘typical’ housing market looks like.”

This year, experts agree we may see the return of greater stability and predictability in the housing market if inflation continues to ease and mortgage rates stabilize. Here’s what they have to say.

The 2023 forecast from the National Association of Realtors (NAR) says:

“While 2022 may be remembered as a year of housing volatility, 2023 likely will become a year of long-lost normalcy returning to the market, . . . mortgage rates are expected to stabilize while home sales and prices moderate after recent highs, . . .”

Danielle Hale, Chief Economist at realtor.com, adds:

“. . . buyers will not face the extreme competition that was commonplace over the past few years.”

Lawrence Yun, Chief Economist at NAR, explains home prices will vary by local area, but will net neutral nationwide as the market continues to adjust:

“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”

Mark Fleming, Chief Economist at First American, says:

“The housing market, once adjusted to the new normal of higher mortgage rates, will benefit from continued strong demographic-driven demand relative to an overall, long-run shortage of supply.” 

Bottom Line

If you’re looking to buy or sell a home this year, the best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor.

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DAYS ON MARKET (DOM)

While homes were going under contract within just a few days - actually some within a few hours - back in 2021, today they are staying on the market much longer.  The market has definitely changed, but, in spite of longer Days on Market (DOM), we remain in a Seller's market.  Be sure to check out my January 1 posting 2022 END OF YEAR STATS for details. 

Below you can see the number of DOM for both Sun City and TreeTops as of January 8, 2023.

Counting stops when a property goes Under Contract. 

No properties have Closed yet in 2023 at SCCL.

Three properties have Closed at TreeTops.

SCCL - Single Family Residences

ACTIVE LISTINGS

Note that #4 shows 6 DOM, but it has actually been on the market for 218 Continuous Days (CDOM).  The DOM counting goes to zero when there is a change of agents, but the counting will still show up as CDOM.  In this case, the listing expired on 12/31/22 and was given a new MLS number when it came back on the market, although by the same agent.

CURRENTLY UNDER CONTRACT

 

SCCL - Carriage Homes and Villas

ACTIVE LISTINGS

CURRENTLY UNDER CONTRACT

 

TreeTops

ACTIVE

CURRENTLY UNDER CONTRACT

CLOSED SINCE 1/1/23

 

REMEMBER, YOU CAN ALWAYS CHECK THE CURRENT DAYS ON MARKET USING THE TABS FOR SCCL AND TREETOPS AT THE TOP OF THE PAGE.

2022 END OF YEAR STATS

As the year comes to an end, it's time to look at where we started, where we ended, and where we are headed.  Although markets throughout the country are being affected by inflation, a looming recession, and rising interest rates, with buyers and sellers often hesitant to make a move, our market remains active... slower than we've been used to, but active.  

 

Although many markets around the country are tied to an academic year schedule, where families want to make a move before a new school year begins, active 55+ communities in this area are affected more by weather conditions in the north and the desire for folks to flee the cold, reduce their property taxes, and enjoy a wonderful new lifestyle. 

 

Current interest rates may be daunting for some, especially for those on fixed incomes, but others are at a point in their lives when they may be able to cash out their current homes and purchase a home without a mortgage. 

 

So, what kind of market are we in right now?  The best answer lies in how many months of inventory we currently have.  Months of supply is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there is a 5 month supply of homes for sale.  

 

2022 began as a strong seller's market and, in spite of increases in the the number of "Days on Market" (DOM) before going under contract and some downward adjustments to list prices, it remains a seller's market, albeit not as strong as we have grown accustomed to in the past year or so.  The numbers in red below are for November and December 2022.

 

SCCL Single Family Homes

 SCCL Carriage Homes and Villas

 

TREETOPS

  Below are the end-of-year stats for both SCCL and TreeTops.

The number of Active listings was very low 

during the first quarter and began to increase mid-year.  

You can always find the most current stats using the tabs at the top of this page. 

Be sure to come back often to check out what the market is doing.