OWNERS OVERVALUE HOMES by LARGER MARGIN

   

For the seventh consecutive month, the gap has widened between what home owners say their home is worth compared to what appraisers say, according to Quicken Loans’ August 2015 Home Price Perception Index.

Home owner estimates now stand 2.65 percent higher than appraiser opinions, the largest gap in more than a year, according to the index.

“The perception trend of most of this year suggests home owners may be assuming that home values have been in a steady, linear path upward,” says Bob Walters, Quicken Loans chief economist. “In reality, home values have remained mostly flat this year, and this false assumption may be leaving home owners disappointed when their appraisals come in.”

The chart below gauge home owners' versus appraisers' value perceptions by metro.

















Source: Quicken Loans

 

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6 Key Housing Stats to Gauge the Market

Existing-home sales were back on the rise in July, marking the third consecutive month of increases, while low inventories of homes for-sale and rising prices were the reason behind first-time buyers falling to their lowest share since January, according to a new report from the National Association of REALTORS®.

Total existing-home sales – which include single-family homes, townhomes, condos, and co-ops – rose 2 percent in July to a seasonally adjusted annual rate of 5.59 million. Sales are at the highest pace since February 2007, and are 10.3 percent above a year ago.

"The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more household to buy now," says Lawrence Yun, NAR’s chief economist. "As a result, current home owners are using their increasing housing equity toward the down payment on their next purchase."

Here's a look at five main indicators from NAR's latest housing report:

1. Home prices: The median existing-home price for all housing types was $234,000 in July – 5.6 percent above a year ago. "Despite the strong growth in sales since this spring, declining affordability could begin to slowly dampen demand," says Yun. "REALTORS® in some markets reported slower foot traffic in July in part because of low inventory and concerns about the continued rise in home prices without commensurate income gains."

2. Housing inventories: At the end of July, the inventory of homes for-sale fell 0.4 percent to 2.24 million existing homes available for sale. The inventory now is 4.7 percent lower than a year ago and at a 4.8-month supply at the current sales pace.

3. First-time home buyers: The percentage of first-time home buyers fell for the second consecutive month, reaching 28 percent in July – the lowest share since January. Last year at this time, first-time buyers comprised 29 percent of all buyers.

"The fact that first-time buyers represented a lower share of the market compared to a year ago even though sales are considerably higher is indicative of the challenges many young adults continue to face," says Yun. "Rising rents and flat wage growth make it difficult for many to save for a down payment, and the dearth of supply in affordable price ranges is limiting their options."

4. Days on the market: Properties stayed on the market for an average of 42 days in July, below the 48 days average from a year ago. Forty-three percent of homes were on the market for less than a month in July. Short sales were on the market the longest at a median of 135 days while foreclosures were on the market for 49 days and non-distressed homes sold in 41 days.

5. All-cash sales: The percentage of all-cash sales rose to 23 percent of transactions in July, down from 29 percent a year ago. The share of individual investors – who account for the bulk of cash sales – was 13 percent in July, down from 16 percent a year ago.

6. Distressed sales: The percentage of foreclosures and short sales declined to the lowest share since NAR began tracking it in October 2008. Distressed sales fell 7 percent in July month-over-month and are 9 percent below a year ago. In July, 5 percent of sales comprised foreclosures while 2 percent were short sales. On average, foreclosures sold for a discount of 17 percent below market value while short sales sold for an average discount of 12 percent.

"Five years ago, distressed sales represented 33 percent of the market in July," says Chris Polychron, NAR's president. "For many previously distressed homeowners throughout the country, rising home values in recent years have helped recover equity and the vast improvement in several local job markets means fewer are falling behind on their mortgage payments."

Source: National Association of REALTORS®

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47% of Homes Are Selling in Less Than a Month (Call Me Now!!!)

In some cities across the country, homes are selling faster than ever.

Nationally, properties typically stayed on the market for 34 days in June, the shortest number of days since the National Association of REALTORS® began tracking in May 2011. Short sales spent the most time on the market with a median of 129 days, foreclosures sold in 39 days, and non-distressed homes were on the market for 33 days. NAR reports that 47 percent of homes sold in less than a month in June.

The real estate brokerage Redfin's barometer is showing the median time on the market dropped to just 26 days in June, the shortest time on record. In some hot housing markets, homes were falling under contract in 11 days or less.

Denver homes sold in six days or fewer in June; Seattle's median was nine days; Portland was 10 days; and Boston was 11 days, according to Redfin.

But some cities are seeing longer selling times. For example, the median time on the market for homes in Brownsville, Texas was 122 days; Myrtle Beach, S.C., was 105 days; Miami was 75 days; and metro New York 68 days, according to June data from realtor.com®, which is based off of information from local MLSs nationwide.

The strength of the local economy, employment and income growth, and low inventories of homes for sale compared to demand are all factors that lead to faster selling times, according to economists.

Source: "Selling Times Reaching New Lows," The Seattle Times (July 28, 2015) and "Home Prices Reach an All-Time High," REALTOR® Magazine Daily News (July 23, 2015)

 

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First-Time Buyers Fuel Latest Sales Boost

Existing-home sales rose in May to their highest pace in nearly six years, largely attributed to a big rise in the number of first-time home buyers, according to the National Association of REALTORS®' latest housing report, released Monday. All major regions saw sales increases in May, with the Northeast seeing the most notable rise.

Existing-home sales – measured as completed transactions of single-family homes, townhomes, condos, and co-ops – climbed 5.1 percent to a seasonally adjusted annual rate of 5.35 million in May. Sales are 9.2 percent above last year at this time.

The market share of first-time home buyers rose to 32 percent of transactions in May, matching the highest share since September 2012. A year ago, first-time buyers represented 27 percent of all buyers, NAR reports.

"The return of first-time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low down payment programs," says Lawrence Yun, NAR's chief economist. "More first-time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise."

As the supply of homes remain tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation, Yun notes. "Without solid gains in new home construction, prices will likely stay elevated – even with higher mortgage rates above 4 percent," Yun says.

5 Stats to Gauge the Market

Here's an overview on key market conditions from NAR's latest existing-home sales report:

1. Inventory: Total housing inventory rose 3.2 percent to 2.29 million existing homes available for sale by the end of May. That is 1.8 percent higher than a year ago. Unsold inventory currently is at a 5.1-month supply at the current sales pace, down from 5.2 months in April.

2. Home prices: The median existing-home price for all housing types was $228,700 in May – nearly 8 percent above May 2014 home prices.

3. Days on the market: Properties typically stayed on the market for 40 days in May, up from 39 days in April. Still, that marks the third shortest time since NAR began tracking days on the market in May 2011. Forty-five percent of homes sold in May were on the market for less than a month.

4. All-cash sales: All-cash sales comprised 24 percent of transactions in May, down considerably from a year ago when they made up 32 percent of transactions. Individual investors, who account for the  bulk of cash sales, purchased 14 percent of homes last month, down from 16 percent a year ago. Sixty-seven percent of investors paid cash in May.

5. Distressed sales: Foreclosures and short sales remained at 10 percent for the third consecutive month in May. Distressed sales are below the 11 percent share a year ago. Seven percent of May sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in May while short sales were also discounted 16 percent.

Regional Breakdown

The following is a snapshot of how existing-home sales fared across the country in May:

• Northeast: existing-home sales rose 11.3 percent to an annual rate of 690,000. Sales are now 11.3 percent above a year ago. Median price: $269,000, up 4.8 percent above May 2014 levels.
• Midwest: existing-home sales rose 4.1 percent to an annual rate of 1.27 million in May. Sales are 12.4 percent above May 2014. Median price: $181,900, up 9.4 percent from a year ago.
• South: existing-home sales increased 4.3 percent to an annual rate of 2.18 million in May, and are 6.9 percent above year ago levels. Median price: $198,300, up 8.2 percent from a year ago.
• West: existing-home sales increased 4.3 percent to an annual rate of 1.21 million in May, and are 9 percent above a year ago. Median price: $324,000, up 10.2 percent above May 2014.

Source: National Association of REALTORS

 

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Pending Home Sales Climb in April to Highest Level since May 2006

WASHINGTON  — Pending home sales rose in April for the fourth straight month and reached their highest level in nine years, according to the National Association of Realtors®. Led by the Northeast and Midwest, all four major regions saw increases in April.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 3.4 percent to 112.4 in April from a slight upward revision of 108.7 in March and is now 14.0 percent above April 2014 (98.6) — the largest annual increase since September 2012 (15.1 percent). The index has now increased year-over-year for eight consecutive months and is at its highest level since May 2006 (112.5).

Lawrence Yun, NAR chief economist, says the steady gains in contract activity each month this year highlight the fact that buyer demand is strong. "Realtors® are saying foot traffic¹ remains elevated this spring despite limited — and in some cases severe — inventory shortages in many metro areas," he said. "Homeowners looking to sell this spring appear to be in the driver's seat, as there are more buyers competing for a limited number of homes available for sale."

Adds Yun, "As a result, home prices are up and accelerating in many markets."

Following April's decline in existing-home sales, Yun expects a rebound heading into the summer, but the likelihood of meaningful gains will depend on a much-needed boost in inventory and evidence of moderating price growth now that interest rates have started to rise.

"The housing market can handle interest rates well above 4 percent as long as inventory improves to slow price growth and underwriting standards ease to normal levels so that qualified buyers — especially first-time buyers — are able to obtain a mortgage."

After falling four straight months, the PHSI in the Northeast bounced back solidly (10.1 percent) to 88.3 in April, and is now 9.4 percent above a year ago. In the Midwest the index increased 5.0 percent to 113.0 in April, and is 13.3 percent above April 2014.

Pending home sales in the South rose 2.3 percent to an index of 129.4 in April and are 14.8 percent above last April. The index in the West inched 0.1 percent in April to 103.8, and is 16.4 percent above a year ago

Total existing-home sales in 2015 are forecast to be around 5.24 million, an increase of 6.1 percent from 2014. The national median existing-home price for all of this year is expected to increase around 6.7 percent. In 2014, existing-home sales declined 2.9 percent and prices rose 5.7 percent.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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5 Upgrades That Sell Your Home

Selling your home isn't easy, especially if you live in a very competitive or saturated market. How can you make your home stand out? Fortunately, some home improvements hold universal appeal for potential buyers. To get the best bang for your buck, put your money into these upgrades before putting your house on the market.

Start with the most basic requirements

It might not seem glamorous, but it's necessary: Fix the things that need to be done. If your pipes are leaking, no one is going to care what the kitchen looks like. If the furnace doesn't work, buyers might not bother looking at the awesome master suite. Replacing things like the roof or siding have consistently shown up at or near the top of the list for projects that allow homeowners to recoup a majority of their investment upon a home sale, according to Remodeling Magazine's Cost vs. Value report.

Begin with a list of upgrades that would matter most to you if you were the one buying a new house. Could you handle those old, drafty windows? Would you be willing to live with a damp basement? Would you agree to move into a house that had a serious roof issue? If the answer is no, replace those things first.

Update the kitchen

Once necessary repairs are completed, turn to the kitchen. The kitchen is the heart of the home, and it is also what sells the home to many buyers. A great kitchen layout, complete with modern, energy-efficient appliances and lots of good lighting, can make anyone pause for a second look. Now is the time to turn to upgrades like refacing those old cabinets (assuming the cabinet boxes are sound), investing in new countertops, and springing for a shiny faucet -- a hands-free one if you really want to impress.

You can do these things without much of a financial hit, but if you really want to sink some cash into the kitchen upgrades, look to a minor kitchen remodel. Remodeling Magazine reports that for a national average cost of just over $19,000, you could have a complete cabinet refacing, new countertops and flooring, a mid-priced sink and faucet, and all new paint and trim. This might lead to a return on investment of about 79% -- not a big money-maker, but perhaps enough to sell your home to impressed buyers.

Refresh the bathroom

The bathroom should be an oasis. If yours is something much less, consider improving it with new lighting, fresh caulking around the tub and shower, and bright new faucets that draw the eye. If things are really rough in there, consider replacing the vanity with something more modern (including a nice new granite or marble countertop), laying new tile, and painting or wallpapering the walls with something fresh and attractive.

A minor bathroom remodel doesn't cost as much as the aforementioned kitchen remodel, according to Remodeling Magazine, but it also doesn't return as much on your investment. A bathroom remodel could set you back a national average of almost $17,000, and includes replacing the tub and shower, installing all new faucets, a new vanity and standard toilet, fresh wallpaper, and ceramic tile flooring. The recoup is about 70%.

Dig into the landscaping

Curb appeal matters, so make it count. Take good care of your trees and shrubs, keep the lawn looking nice, and sweep the driveway on a regular basis. If serious upgrades are called for, consider adding new flower beds, resealing the driveway, lighting up the walkways and adding a deck or patio. An easy way to enhance curb appeal is with a new door, made of steel or solid wood core, in a color that makes the house "pop."

When it comes to making money on your investment, landscaping can carry a big bang for your buck. For instance, a new steel entry door can cost about $1,200 but can return over 101% on investment, while a new deck can cost about $10,000 and return 80% on investment. Even a garage door replacement, at about $1,500, can bring back over 88% of what you put into it, according to Remodeling Magazine.

One final investment: a home stager

No matter how carefully you invest in home improvements, you might need some help in showing it off. A home staging expert can carefully arrange the furniture, art and other decor to create a look that will draw in potential buyers. These experts can also give you a firm idea of what you need to work on inside the home, such as reglazing that old tub or adding more lighting to a particular room.

Keep in mind that home staging is not a field that requires any particular credentials, so in-depth research into the home stager's work history and experience is a must. Insist on seeing a portfolio of previous work. Expect to pay $200-$500 for an in-home consultation -- the cost depends upon the size of your home, according to Cost Helper. If you choose to use a home stager throughout the time your home is on the market, you might spend up to $8,000 or more, depending upon where you live.

When selling your home, having an edge over the competition can mean the difference between a quick sale and a long languish on the market. By choosing the upgrades that suit your budget and your home's needs, you can enhance your chances of closing the deal.

The original article: 5 upgrades that sell your home and additional kitchen remodeling articles can be found on ImproveCenter.com.

About the Author
Shannon Lee is a freelance writer and occasional novelist with a serious weakness for real estate

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