Home Selling

9 Housing Trends To Expect Nationwide In 2019

 

It's hard to believe another year has come and gone so soon. As we're preparing to welcome 2019 there are some national real estate trends you should be aware of. The challenge of low inventory is likely to continue, however we're starting to see an uptick in builders constructing more entry-level homes which will be a great asset to first time buyers. 

Here are nine housing and mortgage trends to watch for in 2019.

1. ISO: More homes for sale

Real estate has been a seller’s market for more than six years, meaning that there are more would-be buyers than homes for sale, sliding the balance of negotiating power in sellers’ direction. It's looking like that will remain the case through 2019 as well. 

Now, while a seller's market isn't ideal for buyers, there is hope on the forecast as we expect to see more homes hit the market than we have in the past several years. 

Freddie Mac, a government-sponsored enterprise that provides capital to the mortgage market, estimates that 370,000 fewer homes were built in 2017 than were needed to satisfy demand resulting from population growth. “Until construction ramps up, housing costs will likely continue rising above income, constricting household formation and preventing homeownership for millions of potential households,” Freddie Mac concludes.

2. Home prices are expected to rise

This is great news for current homeowners, but may prove to be a challenge to buyers entering the market for the first time. Don't panic, though, prices are not expected to rise as dramatically as we've seen over the past several years.

“Home price appreciation will slow down — the days of easy price gains are coming to an end — but prices will continue to rise,” says Lawrence Yun, chief economist for the National Association of Realtors. NAR predicts that existing home prices will rise 2.5% in 2019, to a median of $265,200, compared with a 4.7% rise in 2018, to $258,700.

CoreLogic and Realtor.com also predict a slowdown in sale prices of existing homes in 2019.

Home price appreciation has slowed in 2018, says Frank Nothaft, chief economist for CoreLogic. “Rising prices and interest rates have reduced home buyer activity and led to a gradual slowing in appreciation,” he wrote in a market commentary.

3. Mortgage rates will rise

We've been extremely fortunate the last few years that interest rates have remained quite low, allowing many new buyers to purchase their first home relatively easily. From the beginning of 2018 to mid-December, 30-year fixed mortgage rates went up a little less than three-quarters of a percentage point, to around 4.75%. Forecasters expect mortgage rates to rise again in 2019 — but at a slower pace.

Freddie Mac expects the 30-year fixed mortgage rate to rise half a percentage point in 2019, and the National Association of Realtors predicts a rise of 0.4 percentage point. Fannie Mae’s forecast is for an increase of just 0.1 percentage point.

Keep in mind that these are predictions about where mortgage rates will end this year and end next year. In between, mortgage rates can bounce up and down.

4. Affordability 

As always, finding affordable housing is a concern for As home prices and mortgage rates rise in tandem, home buyers find it harder to afford homes. Nationwide, areas with lower inventory will of course see higher prices and more competitive markets. 

5. Smaller Homes

From a home buyer’s perspective, most markets need more houses for sale, and they need to be on the affordable end of the price scale. After all, many first-timers buy starter homes instead of forever homes, with prices below the area’s median. There are signs that home builders are responding by building smaller, more affordable homes.

“Continuing a multiyear trend, new single-family home size decreased during the third quarter of 2018,” wrote Robert Dietz, chief economist for the National Association of Home Builders, in a November blog post. “New home size has been falling over the last three years due to an incremental move to additional entry-level home construction.”

According to the U.S. Census Bureau, the median size of single-family homes started in the third quarter of 2018 was 2,320 square feet. That’s 4.9% smaller than the median size of new homes three years earlier, at 2,440 square feet.

Hopper says Navy Federal’s members typically shop for homes costing less than $300,000 — and they like to buy new homes. He says he’s encouraged that builders are focusing on these customers.

“I think for many years, the builders were focused on that $500,000-and-up market because the margins were healthier,” he says. “But they’re starting to find now that there’s so much pent-up demand in the lower-end-priced market that they can sustainably offer communities and new construction, and we’ve seen a lot of growth in that space.”

Year-over-year median prices for new homes began decelerating in spring 2018. At $309,700, the median price of a new home in October was 3.1% lower than the median new-home price 12 months earlier. But Fannie Mae and NAR predict that new-home prices will rise in 2019.

6. First-time buyers dominate

The mortgage and real estate industries are focused on serving first-time home buyers, and for good reason: “First-timers have dominated the mortgage market for the past 10 years, and their share today is still high," according to an Urban Institute report published this summer, which adds: “We don’t see this changing anytime soon."


Before the housing crisis, first-time home buyers took out about 40% of purchase mortgages, according to the institute. Lately the first-timer share has been about 60%.

Tian Liu, chief economist for Genworth Mortgage Insurance, says 80% of the growth in home sales in the past three years has come from first-time buyers, and the reason is simple: They represent years of pent-up demand.

“Between 2007 and 2015, our estimate is that roughly 3 million first-time home buyers delayed buying a home, and they’re reaching that age when they can no longer delay,” Liu says. “Their housing needs are really catching up with them. It doesn’t feel right to be raising a family in a rental apartment. They want to own their place. So I think those drivers will be very significant for the next few years.”

7. Lending standards ease a little

Mortgage lenders learned an enduring lesson in the housing crisis a decade ago: Make sure borrowers can repay their loans. So lenders tightened mortgage standards, partly on their own and partly in response to a regulatory crackdown on risky mortgages. These changes made it harder to get a home loan.

The Urban Institute’s Housing Finance Policy Center has argued that lenders overcorrected after lending too freely in the two or three years preceding the financial crisis of 2008.

There is evidence that lenders agree. Gradually, they have been relaxing lending standards.

“Not drastically, but looser than it was a year ago,” says Matt Hackett, operations manager for Equity Now, a mortgage lender in New York City. “It’s not a floodgate scenario where people just start changing guidelines drastically.”

He says he has observed that the relaxed standards come in the form of reduced documentation requirements, lower credit scores and bigger loan-to-value ratios (smaller down payments, basically).

Mortgage data provider Ellie Mae shows that the relaxation of credit standards indeed has been gradual. Average credit scores for home purchases slipped a bit in October (the latest data available) compared with 12 months earlier. Debt-to-income ratios, which measure borrowers’ debt loads, nudged upward over the same period. That means they have higher debt and less flexibility to withstand financial emergencies.

8. More borrowers choose ARMs

It’s almost as predictable as May flowers following April showers: Whenever rates on fixed-rate mortgages go up, you’ll see more borrowers opting for adjustable-rate mortgages. It happened in 2018 and it could continue into 2019.

Borrowers choose ARMs because the initial rates on adjustables are lower than the rates on fixed-rate mortgages. This gives borrowers lower monthly payments in the first few years. ARM borrowers take the risk that their rates and monthly payments could climb when the rate-adjustment period begins.

More borrowers have been accepting the risk. In October, 8.2% of mortgages were ARMs, according to Ellie Mae; 12 months earlier, ARMs had a 5.5% share of mortgages.

Rising rates on fixed-rate mortgages aren’t the only reason for adopting ARMs. Adjustables are most popular in the highest-priced housing markets, such as San Jose, according to CoreLogic.

Taking out an ARM as rates rise, like now, could be a bad idea because borrowers might face higher mortgage payments once the annual loan adjustments kick in.


But getting an ARM can be a good strategy for borrowers who don’t plan to overstay the initial interest rate. A 3/1 ARM, for example, has a lower introductory rate that lasts three years and then adjusts annually afterward. Someone getting, say, a 5/1 ARM is betting that they’ll refinance or sell the home within five years or so, before the rate potentially adjusts upward.

9. Overconfident sellers could struggle

As mentioned before, 2019 will remain a seller’s market, where would-be buyers outnumber the supply of homes they can afford. But that doesn’t mean home sellers can expect bidding wars from desperate buyers.


That’s especially the case with people who are selling homes that are priced above the median for their local market, Realtor.com economist Hale says. First-time buyers dominate most markets, and they tend to shop for homes priced below the median. As a seller, Hale says, “if you’re in that above-median price point, you’re going to have to price competitively and offer incentives for buyers.”

Hale adds: “Surprisingly, it’s going to be more difficult for buyers and sellers in 2019.” Especially for buyers looking for less expensive homes and sellers selling more expensive ones.

 

More information Here. 

Buyer Demand Far Outpaces Inventory...NOW Is The Time To Sell!

Inventory in our area is still very competitive for home sellers, and buyers are entering the market to take advantage of low interest rates. It is truly a great time to enter the real estate market no matter which end of the spectrum you're on!

The price of any item is determined by the supply of that item, as well as the market demand. The National Association of Realtors (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their Realtors Confidence Index.

Their latest edition sheds some light on the relationship between Seller Traffic (supply) and Buyer Traffic (demand).

Buyer Demand

The map on the right was created after asking the question:

“How would you rate buyer traffic in your area?”

The darker the blue, the more buyers are looking for homes in that area. Only 3 states came in with a weak demand level.

 

 

Seller Supply

The Index also asked:

“How would you rate seller traffic in your area?”

As you can see from the map on the left, a good portion of the country has weak seller traffic, meaning there are far fewer homes on the market than what is needed to satisfy the buyers who are out looking for their dream homes.

Bottom Line

Looking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet the buyer demand, prices will continue to increase. This is great news for homeowners thinking of selling their home. Buyers should not be discouraged; low interest rates allow for affordable options even when inventory is low. 

 

Tips To Sell Your Home Faster (And For More Money!)

When our clients ask for our assistance selling their home, their two main concerns are timeline and price. 

 

We've been in the Real Estate industry a long time, and have amassed countless tips and strategies to address both of those concerns. We decided to put together an online magazine to make our best advice available to the whole community!

Below you'll find a link to check out our magazine and learn some of our best home selling strategies. When the time comes to list your home, we'll be here to walk you through the process and make it not only quick and painless, but fun and profitable as well! Give us a call any time, we're always happy to help.

 

 

Halloween For Home Sellers

 

 

The doorbell to your home is used more on October 31st than potentially any other day of the year. It’s Halloween and there’s arguably no holiday where home plays a bigger role.

Sure, other holidays have traditions, but none encourage families to get out and actually walk around their neighborhoods going door-to-door. This is a perfect opportunity to meet new neighbors and spread the word that your home is on the market! Leave a lasting impression with tasteful lights, decorations, and of course, candy for the kids. It’s a night where we literally open our doors to others and make preparations to give regardless of who steps to our front door - something we should probably do more often.

We hope this year you'll be dazzled by the decorations and charmed by the children’s (and the dog’s) costumes, and we hope it brings a little joy to your heart as you think of all that home means…even on the scariest night of the year.

Here’s to Halloween and all the things that make a house a home.

If you have pictures of your home from Halloweens past or present, share them with us on Instagram by tagging them with @SignatureVTHomes

Top Home Staging Tips That Sell Homes Faster & For More Money

 

 

According to the National Association of Realtors, for every $100 invested in staging, the potential return is $400! Staged homes not only bring in higher offers, but they normally sell much quicker than their non-staged counterparts. If you're thinking of listing your home, we would highly recommend at least some level of staging. Read on for our top tips to get your home prepped for sale.

 

 

 

Keep Decor Neutral.

Neutral doesn't have to mean boring. What we mean is avoid bold, bright colors (this includes stark white!) all throughout the home. The goal here is to appeal to the masses, and while your favorite color may be fuchsia, it won't necessarily translate well to potential buyers. That being said, we're providing tips to give you the best return on your investment, so if re-painting is out of the question, it'll just require some extra attention and thoughtful accessorizing to convince buyers that fuchsia might be their new favorite color.

 

 

 

De-Clutter

When buyers walk into your home, they want to be able to picture themselves, and their belongings there. Think of this step as a head-start on packing, and really minimize any extra possessions. A vase of flowers and a nice painting here and there will be great, but it's time to pack up personal pictures, diplomas, framed certificates, refrigerator art, etc. It's not that buyers wouldn't like your taste, it's that their goal is to make the space their own. It's easier to do that if personal possessions are kept to a minimum. While we're on the topic, this is also a good time to consider removing anything that could be considered divisive (think political memorabilia and the like). 

 

 

 

 

Strike a balance.

Yes, you're right, we just told you to minimize your personal possessions. But, what you don't want to do is go too far and remove every stitch of personality from the home. Selling a vacant home can be just as challenging as selling an overcrowded one. Remember how we said buyers are trying to picture themselves living in your home? That'll be a lot easier to do when rooms remain furnished. Surprisingly, furnished rooms actually appear bigger than empty ones! They also show less flaws and make it appear as though you're not in a huge rush to sell. Sometimes a vacant home can give that impression and therefore bring in lower offers. 

 

 

 

 

Remodel with caution.

Not only is remodeling generally a very pricey and time consuming process, but it can be a big gamble. Furthermore, if you need to take out a loan in order to fund your remodel, it could be harmful to your credit score and run you the risk of not recouping your investment. Even sellers with the best of intentions can't predict what buyers will be looking for in terms of decor. This is one of those situations where you'd be wise to consult with your realtor and get their opinion before taking on an extensive remodel. That being said, cosmetic fixes and repairs are always good things to get taken care of before listing your home. 

 

 

 

 

Be Timeless.

Interior design trends, just like fashion trends, come and go and there is a fine line between retro-funk and just plain out dated decor. When preparing your home for sale, it's best to air on the side of caution and avoid anything too trendy. A pop of color here and there (think pillows, curtains, bedding) can be very tasteful, but avoid anything that could read as out dated (shag carpeting, ruffled tapestry etc.).

 

Did you know that we offer home staging advice? If you're considering listing your home, we will happily offer personalized guidance to steer you in the right direction! Send us an email for more information. 

Do these things now if you want to sell your home this fall

We're not trying to wish away the last few weeks of summer, but if you're thinking of listing your home for sale this fall, now is the time to prepare. Fall and winter may not traditionally be the busiest times for real estate sales, but they do attract the most serious buyers. With inventory decreasing, you can bet more eyes will be on your home! These tips will help make it even more attractive.

 

 

The most important step you can take when you decide to sell your home is to find a trustworthy agent to assist you. According to the National Association of Realtors, 89% of home sellers choose to work with a realtor rather than attempting to sell their home themselves. There are many reasons home sellers seek out professional help, including a notable increase in selling price, a decreased amount of time spent on the market, and the peace of mind that comes with having a seasoned realtor on call. 

It's important to find a realtor that you feel comfortable and secure with. A home is usually the largest financial asset our clients own, and it deserves to be treated with care and respect. A great realtor will keep in contact, explain every detail of the sales process, market your home widely to qualified buyers, and most importantly, help you get the greatest return possible on your investment. 

If you're considering selling your home, one of our agents would be more than happy to hear your thoughts, and provide you with a report on your home's value!

 

 

Our second tip is to start a home maintenance "to do" list and start checking things off. Take care of any obvious repairs and maintenance that you can in advance so your home is ready to be shown when it hits the market.

Below are a few commonly forgotten items that really make a difference to prospective buyers:

Inside:

- touch up paint 

- replace burned out light bulbs

- be sure doors and windows are jam-free

- shampoo carpets

- replace any broken screens

- deodorize areas exposed to pets or smoke

- pack up any superfluous belongings to make the home show-ready

Outside:

- keep grass and landscaping tidy

- rake excess leaves - especially important this time of year!

- be sure any outdoor lights are working properly

- clean garage/barn

- touch up paint if necessary

- clean gutters and windows

- be sure walkways are clear of debris

 

 

Fall in Vermont is one of the most beautiful times of year! As the daylight hours become fewer, it's important to add a few extra lights to your home before you list it. If you don't already have a porch light, it would be a very nice, welcoming touch - be sure to leave it on before showings, too! Inside you may want to add a few lamps here and there to brighten your space.

If your home has a fireplace, now is the time to emphasize it! With chilly days ahead, making your home feel cozy and warm will be especially attractive to buyers.

 

 

Curb appeal is essential for home sellers regardless of season, but it's especially important in the fall. Summer spoils us with lush greenery and beautiful flowers, and can make late fall feel dreary in comparison. Add a few potted plants or pumpkins by your front door or mailbox, remember the front porch light, and keep landscaping tidy. All of these things will help your home to stand out when it comes time to sell!