Uncategorized October 17, 2024

Why Did More People Decide To Sell Their Homes Recently?

Why Did More People Decide To Sell Their Homes Recently?

Homeowners typically slow down their moving plans as the summer months wrap up, and as a result, fewer homes are listed for sale in the fall. It’s a predictable, seasonal trend in real estate. But this year, mortgage rates came down at the same time the number of homes on the market usually starts to decline. So, what happened? More homeowners decided to sell, so more homes came to the market.

The most recent data from Realtor.com reveals that in September, the number of homes put up for sale increased by 11.6% compared to this time last year.

As the green circle in the graph below shows, the typical September decline in homes coming to the market didn’t happen – that number actually went up (see graph below):

a graph of a number of homesRalph McLaughlin, Senior Economist at Realtor.comexplains why there was an unseasonable rise:

“This sharp increase is largely due to the decline in mortgage rates in mid-August, enticing homeowners to sell.”

So, as rates came down at the end of the summer, more people jumped into the market and decided to make their move.

What Does This Mean If You’re Looking To Buy a Home?

It means more fresh options to choose from than you’ve had in a while – not the ones that have been sitting around, unsold.

But keep in mind, mortgage rates have been volatile lately, ticking up slightly in recent weeks, which could limit the number of people who feel comfortable with the idea of selling in the months ahead. And in this market, it’s mortgage rates that are largely driving homeowner decisions.

Why Buy Now, Rather Than Wait?

Whether you’re looking for a starter home, an upgrade, or hoping to downsize, you have more homes to choose from right now. And if you can find what you’re looking for, know that these new, fresh options won’t be on the market forever. So, staying on top of what’s available in your local area with a trusted agent is key.

And remember, one month doesn’t make a trend. So, what does that mean going forward? Whether more homeowners than normal continue to put their houses on the market will largely depend on what happens with mortgage rates and the economic factors that impact them, like inflation, employment, and the reactions by the Federal Reserve.

With that in mind, now might be your moment, while more homes are available – if you’re ready, willing, and able to buy this fall.

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

“The rise in inventory – and, more technically, the accompanying months’ supply – implies home buyers are in a much-improved position to find the right home and at more favorable prices.”

Bottom Line

As rates came down at the end of the summer, sellers started to trickle back into the market, which means buyers have more choices right now. Let’s connect to make sure you have a trusted advisor to help you navigate the new options before they’re all scooped up.

Uncategorized October 15, 2024

Home Values Rise Even as Median Prices Fall

Recent headlines have been buzzing about the median asking price of homes dropping compared to last year, and that’s sparked plenty of confusion. And as a buyer or seller, it’s easy to assume that means prices are coming down. But here’s the catch: those numbers don’t tell the full story.

Nationally, home values are actually rising, even if the median price is down a bit. Let’s break down what’s really happening so you can make sense of the market without getting caught up in the fear the headlines create.

Homes on the Market Right Now Are Smaller

The biggest reason for the dip in median price is the size of homes being sold. The median price reflects the middle point of all the homes for sale at any given time. And that’ll be affected by the mix of homes on the market.

To show you how this works, here’s a simple explanation of a median (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median (the middle one) is 10 cents. If you have two nickels and one dime, the median is now five cents.

In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change. The same is true for housing.

Right now, there’s a greater number of smaller, less expensive homes on the market, and that’s bringing the overall median price down. But that doesn’t mean home values are declining.

As Danielle Hale, Chief Economist at Realtor.comexplains:

“The share of inventory of smaller and more affordable homes has grown, which helps hold down the median price even as per-square-foot prices grow further.”

And here’s the data to prove it.

Price Per Square Foot Is Still Rising

One of the best ways to measure home values is by looking at the price per square foot. That’s because it shows how much you’re paying for the space inside the home.

The median asking price doesn’t take into account the size of different homes, so it may not always reflect the true value. And the latest national price per square foot data shows home values are still increasing, even though the median asking price has dropped (see graph below).

As Ralph McLaughlin, Senior Economist at Realtor.com, explains:

“When a change in the mix of inventory toward smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year.”

This means that while smaller homes are affecting the median price, the average home’s value is still rising. According to the Federal Housing Finance Agency (FHFA):

“Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.”

So, while headlines may make it sound like prices are crashing, you don’t have to worry. With a closer look and more reliable data, you can see that prices are still climbing nationally.

But it’s important to remember that home prices can vary by region. While national trends provide a big-picture view, local markets may be experiencing different conditions. A trusted agent is the best resource to explain what’s happening in your area.

Bottom Line

The decrease in median price is not the same as a decrease in home values. The median asking price is down mostly due to the mix of smaller, less expensive homes on the market.

The important thing to focus on is the price per square foot, which is a better indicator of overall market value—and those prices are still going up. If you have questions about what home prices are doing in your area, feel free to reach out.

In the News September 15, 2024

Beyond the Headlines: Understanding How Proposed Changes in Real Estate Commissions Will Actually Impact You as a Buyer or Seller

You’ve probably heard the news that there are changes coming in terms of how real estate commissions are paid.

This might sound exciting and like a potential game-changer for you as a home seller or buyer, with headlines proclaiming things like:

  • “Real estate commissions are being slashed!”
  • “Selling your house will now be less expensive!”
  • “No more paying 6% to real estate agents!”

But you’re also probably not sure exactly what it all means, how it will work, or how you’ll benefit from the changes.

Unfortunately, even if you ask the most informed agents on the planet, you probably aren’t going to get many answers. It isn’t because agents don’t want to answer your questions; it’s because they don’t even know exactly how the changes are going to work.

The settlement happened seemingly overnight. There was no advance warning or discussion with agents. They found out by reading a bunch of headlines you probably saw at the same time they did.

On top of that, most of the headlines are misleading, because nobody knows exactly how things are going to play out. Any claims that the media makes that commissions will be cut in half, or any specific number of dollars will be saved by consumers, remains to be seen. The changes might reduce commissions. On the other hand, they could increase them. As with many things the government or court system touches, there’s always the possibility that it could create more issues than it solves.

But, for the time being, as much as you might want or expect your local agent to be able to give you specifics, please understand that they can’t. For starters, it’s a proposed settlement, not yet accepted by the courts, and if it’s approved, the changes won’t start until July.

Here’s What Matters to Buyers and Sellers in a Nutshell

Unless you’re in the business, you probably have no desire to read through all of the court documents or proposed settlement. You just want to know what changes will possibly impact you. So here’s an excerpt from a National Association of REALTORS® press release, highlighting the changes that will most likely affect you:

“In addition to the financial payment, NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS. This would mean that offers of broker compensation could not be communicated via the MLS, but they could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. Offers of compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers. They are also consistent with the real estate laws in the many states that expressly authorize them.

Further, NAR has agreed to enact a new rule that would require MLS participants working with buyers to enter into written agreements with their buyers. NAR continues, as it has done for years, to encourage its members to use buyer brokerage agreements that help consumers understand exactly what services and value will be provided, and for how much. These changes will go into effect in mid-July 2024.”

Again, unless you’re in the business, that may not even be all that clear of an explanation. So to put it in simpler terms:

  • Sellers and their agents won’t be allowed to offer a commission to buyers’ agents within their listing.
  • However, that doesn’t mean that a seller isn’t allowed to pay buyers’ agents a commission. It just can’t be published in the listing.
  • And buyers will now be required to sign a written agreement with an agent in order to work with them, which will likely require them to agree to a certain amount of compensation. That doesn’t necessarily mean the compensation has to be paid out of the buyers’ pocket; it could be an agreed upon amount that will be negotiated into the purchase price paid for through the proceeds of the sale.

Basically, it allows sellers to choose to not offer or agree to pay a commission to buyers’ agents when they list their house for sale, and allows buyers to choose to not work with a buyers’ agent when they buy, in hopes of saving money. But before you do that, there are some things you should keep in mind.

Here Are Some Things to Keep in Mind if You’re Selling a House…

  • It doesn’t mean that you can’t offer a commission to buyers’ agents.
  • Although you can’t publish how much you’re willing to offer or agree to on your listing, in most cases, it will still benefit sellers to offer and be willing to offer commissions to buyers’ agents in order to get the most exposure for their home, and ultimately the best offers possible.
  • There’s a good chance that buyer agent commissions will likely still be paid through the proceeds of the sale, as they have been for many years.
  • If you’re selling to a buyer who doesn’t have an agent representing them, they’ll likely expect you to drop your price accordingly since you’re not paying another agent. In other words, if your house was worth $300,000, and buyers perceive that a buyers’ agent commission would have been 3% — even though it rarely was in reality… but that’s what the public and media have often perceived it to be — then the buyer will want a $9,000 reduction on your price below what they already want to negotiate as the fair market value.
  • It could cause more risk and lawsuits that may directly involve you and your property. Dual agency, which is when an agent represents both the buyer and the seller, is one of the leading causes of lawsuits in the industry. This new way of doing business could create a lot more situations where consumers don’t have their own independent representation, which could lead to either the buyer or seller feeling like their interests weren’t entirely represented.

Here Are Some Things to Keep in Mind if You’re Buying a House…

  • The way buyers’ agents have been paid is a result of originally trying to protect buyers decades ago. Years ago buyers didn’t have an agent dedicated to representing their interests, and were often unaware that the seller’s agent didn’t actually represent their interests as well. So rules and laws were passed to change that, and listing agents were compelled to offer buyers agents a percentage of the commission if they represented a buyer on a house they were listing. This gave buyers more choice in who represented them, and the ability to compensate their agent without having to pay out of pocket. So, for many buyers, this isn’t that great of a change for you unless you cherish the idea of representing yourself and figuring out how to do everything that needs to get done.
  • You will now have to choose a buyer’s agent and sign an agreement with them. This has always been an option, and it could be argued that it should always have been required, but most buyers’ agents didn’t want to seem too pushy or aggressive, so they never asked for one. Now you’ll need to sign a contract to work with them.
  • Don’t expect agents to be willing or able to work for a much lower commission than they’ve been working for in the past. According to recent data from the National Association of REALTORS®, the average agent earns between $44,951 and $58,528. And they work long and hard to even earn that much. There is rarely a day off, let alone a vacation, and they easily work more than 40 hours per week. Will you be able to find an agent who will work for lower rates? Perhaps. But as is the case in any industry, sometimes going with the lowest cost option ends up costing you more in the end.
  • While you may expect sellers to drop their price because they don’t have to pay a buyers’ agent, don’t be surprised if they dig in their heels and expect to get as much or more than similar houses have recently sold for. They will still be basing the market value of their house off of data that had buyer agent commissions factored in.
  • If you go it alone, go in knowing that finding the right house, understanding market values, negotiating the best deals, and handling everything involved throughout the process from contract to closing isn’t as easy as it may sound. There is more to buying a house than just finding it online, making an offer, and then going to a closing. You will have to do the work your agent would have done, and know what needs to be done in the first place. The sellers’ agent won’t be doing the work of the non-existent buyers’ agent.

While it’s impossible to predict exactly how everything will play out, those are a few things to keep in mind whether you’re buying or selling.

The best thing to do if you’re curious or concerned about the coming changes is to reach out to your local agent and ask them for their perspective, insights, advice, and to keep you in the loop as the changes get finalized.

The Takeaway:

While the headlines about changing real estate commission structures might sound exciting and like a potential game-changer for you as a home seller or buyer, they are misleading, because nobody knows exactly how things are going to play out. While it’s true that commissions may shift, the details remain uncertain.

If the proposed settlement is accepted by the courts, sellers won’t be able to advertise agent commissions, however they will still be allowed to offer them, just not within their listing. In many cases this will still benefit the seller to do so in order to get the most exposure for their house, and sell it for the most money possible.

Buyers will be given the option to not work with a buyers agent, however that could come with some unexpected downsides and difficulties, and may not produce the savings they anticipate. Fortunately, you will still be able to hire your own representation, and have an agent looking out for your interests and helping you through the process.

Selling July 18, 2024

Why Fixing Up Your House Can Help It Sell Faster

If you’re thinking about selling your house, you should know there are buyers who are ready and able to pay today’s high prices. But they want a home that’s move-in ready. A recent press release from Redfin explains:

Buyers are still out there and they’re willing to pay today’s high prices, but only if the house is in really good shape. They don’t want to spend extra money on paint or new appliances.”

It makes sense when you think about it. They’re having to pay a lot of money for a house in today’s market. That means they may not be able to easily afford upgrades after they move in. So, if your home is outdated or needs some work, buyers might pass it by or offer a lower price than you were hoping for.

And there are a lot of homes that need upgrades right now. Millions are entering their prime remodel years, meaning they’re between 20 and 39 years old. Maybe yours is one of them. According to John Burns Research and Consulting (JBRC), the number of homes in their prime remodel years is high and growing (see graph below):No Caption Received

If your house falls into this category, it’s important to consider making selective updates to help it appeal to buyers, so it sells faster. But how do you know where to spend your time and money?

Why You Need a Real Estate Agent

By working with a local real estate agent to be strategic about the improvements you make, you can be sure you’re making a smart investment. Put simply, not all upgrades are worth the cost. As Bankrate says:

Before you spend money on costly upgrades, be sure the changes you make will have a high return on investment. It doesn’t make sense to install new granite countertops, for example, if you only stand to break even on them, or even lose money.”

And, as that same Bankrate article goes on to say, that’s where a local real estate agent comes in:

“. . . a good real estate agent will know what local buyers expect and can help you decide what needs doing and what doesn’t.”

As your agent, I might already know what buyers in your area are looking for and what they’re willing to pay for it. By working together, you can avoid spending money on upgrades that won’t pay off. Instead, I can fill you in on which changes will make your house more appealing and valuable. Most important in today’s competitive market PRICE & PRESENTATION are very important!

Reach out and lets walk through your home and work up a plan to list and sell quickly!

Buying July 7, 2024

Things To Avoid After Applying for a Mortgage

Some Highlights

  • There are a few key things you’ll want to avoid after applying for a mortgage to make sure you’re in the best position when you get to the closing table.
  • Don’t change bank accounts, apply for new credit, make any large purchases or transfers, and don’t co-sign loans for anyone.
  • Here’s a good rule of thumb. Always connect with your loan officer before making any financial decisions once you’ve started the mortgage process.
Market Info June 19, 2024

MSA Housing Inventory Reaches Highest Level in 13 Years

In May, the Austin-Round Rock-Georgetown MSA reached the highest level of inventory the area has seen in 13 years at 4.9 months.

With a 37.7% YoY increase in active listings, homebuyers can be much more selective in finding a home that fits their price range.

In May, the Austin-Round Rock-Georgetown MSA saw a 12.8% decline in closed listings with 4.9 months of available inventory, a level that hasn’t been seen in 13 years according to the latest Central Texas Housing Report released by Unlock MLS. Meanwhile, active listings ticked up 37.7% year-over-year. Because of this increase in available options, buyers have the power to be more selective when purchasing a home.

Clare Losey, Ph.D., housing economist for Unlock MLS and the Austin Board of REALTORS®, provided insight into what this data means for buyers and sellers.

“This data demonstrates that buyers can continue to be more selective when searching for a home in their price range. Although it may appear to be a buyer’s market from the outside, it’s important to understand the context behind these statistics, including higher interest rates resulting in a reduction in purchasing power. This market does not offer a clear advantage to either buyers or sellers.”

Kent Redding, 2024 Unlock MLS and ABoR president, elaborated on the importance of working with a REALTOR® to ensure the best possible guidance in navigating this complicated housing market.

“Since the market is no longer as straightforward as it once was, it’s imperative to work with a REALTOR® to navigate current conditions. Working with a professional who understands the nuances of the market can help sellers list their homes at prices that are in line with the market while helping buyers understand how to find the best possible housing options in their price range.”

This is why when selling your home, it needs to be presented very well, professional photography, preferably staged and more important priced well from the very beginning! This is not the time to test the market.

Take a look at the Market Snapshots for May:

Buying May 22, 2024

MUDs, PIDs, PUDs & TIFs: Property Taxes You Should Know Before Buying a Home in Texas

Many factors are at play when buying a home, no matter where you live. Potential homeowners need to determine their budget for a down payment, research the best type of mortgage for their needs, and make sure the home will suit all of their lifestyle needs in the long term.

Though these considerations are true for home buyers across the U.S., some factors are specific to the state where you’re shopping for real estate. Property taxes, for instance. In Texas, there are a few tax-related real estate acronyms that new residents should fully understand before making their purchase. What does a home listing mean when it says it’s part of a PUD? Why do some listings advertise “No MUD or PID”? If you know before you go, you’ll be able to browse listings with confidence.

What Is a MUD?

What is a MUD in Real Estate?

The acronym “MUD” stands for the municipal utility district, a facet of Texas infrastructure that focuses on building and maintaining roads and providing utility services such as stormwater drainage, sewer access, and clean water in areas where the nearest city might be unable to.

MUDs are usually responsible for providing utilities for newer residential developments built outside their nearest city’s public utility services. This often includes the growing trend of master-planned communities.

Essentially, your MUD property tax serves as a contribution to this infrastructure organization and helps provide much-needed water, sewer, and other utility services to your neighborhood.

You’re only responsible for MUD taxes if you live in an area that uses their services, and your MUD tax decreases each year as the upfront cost of the services slowly gets paid off. Additionally, the more homeowners that are paying into a MUD, the less any individual homeowner has to pay.

Not all residents want to live in a city center, and MUD makes it possible to make your home outside busy urban areas while still receiving all of the utilities you need.

What Is a PID?

What is a PID in Real Estate?

While the PID tax is relatively similar to the MUD tax, it has some distinct differences. PID stands for property improvement district, which is a specialized city or county district that focuses on improving and building new infrastructure in an area’s neighborhoods.

The PID tax provides benefits such as better city parks and green spaces, improved neighborhood landscapes, more fountains and lakes, additional shade structures, and other features that appeal to those who live in the area as well as pedestrians and visitors.

This differs from the MUD tax, which focuses on providing water, sewer services, stormwater drainage, and other similar utilities to neighborhoods that are just outside of public city services.

PID taxes are only paid by the residents who reap the benefits of them, which is an even greater incentive for locals in a given area to use the parks and green spaces in their neighborhood.

Additionally, residents have the choice of paying their PID taxes in full in a single lump sum or spreading them out over several years. Most Texas neighborhoods that levy PID taxes pay them over a 20- to 40-year span, making them a relatively affordable expense on a yearly basis.

What Is a PUD?

What is a PUD in Real Estate?

The acronym “PUD” stands for a planned unit development, which is a specially designed community of homes in which every homeowner belongs to a homeowner’s association or HOA.

Depending on the location and what types of features are prioritized in the building of a PUD, they can be made up of any type of home, including single-family homes, but are often associated with condos and townhomes.

Because these are planned developments, residential areas in a PUD are usually interspersed with commercial areas, giving residents easy access to amenities like grocery stores, schools, restaurants, and workplaces. Mandatory HOA membership often helps stabilize home values, and the HOA maintains common areas and community amenities like parks, pools, and playgrounds.

However, with these amenities, as well as the efforts of the HOA, PUD residents are responsible for more taxes and fees than the average Texas homeowner. Additionally, HOAs will set out CC&Rs—covenants, conditions, and restrictions—that PUD homeowners are obligated to abide by.

An important thing to note: all PUDs have HOAs, but not all HOAs are PUDs. The difference between a PUD and an HOA can be a fine one, but as a general rule of thumb, a PUD gives homeowners ownership of both the structure and the lot itself.

What Is a TIF?

What is a TIF in Real Estate?

TIF stands for tax increment financing, a funding method used by cities and counties to invest in neighborhood improvements. In order for TIF to take place, a city or county must establish a tax increment reinvestment zone, or TIRZ, which includes properties from which tax revenue will be captured.

TIF isn’t a tax itself but a method of funding community improvements through taxes. Not current taxes, though—future taxes.

Basically, TIF funding allows a city or county to issue a bond for development projects backed by the expected increase in property tax revenue that the development will generate. By improving the community, local property values will increase, and that increased property value results in increased property tax revenue. With TIF, cities and counties can spend now, pay later.

Each taxing entity within the TIRZ may choose how much of the increased property tax revenue above the original revenue—the “tax increment”—goes toward repaying the TIF bond. Homeowners simply pay their property taxes as usual.

With a TIRZ established, current residents and new homebuyers can be made fully aware of whether a portion of their yearly property taxes are being allocated toward a TIF and what improvements they can expect thanks to that TIF. Some places will even have a list of active TIRZs, such as this list of TIF Districts in Tarrant County.

Finding Your New Home in Texas

The prospect of buying a home is overwhelming enough without all of the other property taxes that can come across during the process. However, once you’re familiar with the terms you may come across in real estate listings, it becomes much less daunting to choose your next home in Texas.

Uncategorized April 26, 2024

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SellingUncategorized April 23, 2024

4 Things to Consider if You Are Waiting to Sell Your House Until After the Real Estate Settlement Takes Effect

Uncategorized April 23, 2024

Here Are Some Things You Shouldn’t Say When Previewing a Home