Summer 2013 Real Estate Update

August 23rd, 2013

 

Photo Header LogoMARKET PERSPECTIVE

Summer Photo

The recovery of the U.S. housing market now appears to be well under way.  While demand is still high, even with credit conditions constraining buyers, the low level of inventory is having a significant effect in most markets.  This is likely to persist through the year, due to the rapid sales velocity and only modest additions to inventory levels.

May saw a significant jump in sales velocity where existing home sales were at the highest point since November 2009, when the annualized sales pace jumped to 5.44 million due to the home buyer tax credit. Prices continued to rise in May, marking the sixth consecutive month of double-digit price growth. With affordability still at historically high levels and the market continuing to improve, it could be an opportune time for a well-informed buyer or seller to enter the market.

5 Important Reminders for Sellers  based on an article by PJ Wade in Realty Times

Futurist and strategist PJ Wade says that most of us are our worst enemies—and where this applies to homeowners who list their homes for sale, she has the following 5 reminders of pitfalls to avoid.

1. Be Realistic About Timing

Waiting for prices to go back up to what they once were may sound like a way to raise your asking price, but remember that 1) we have no way of knowing when or if prices will ever be that high again, and 2) with every year you wait to sell, your house is one more year older and one more year away from appearing brand new.

2. List Your House, Not Your Home

Sellers who sell their home start off with a problem [because] selling a home is a stressful emotional ordeal that challenges rational thought and logical decision making.

Sellers who sell their house … understand that they are selling real estate. Making the mental leap from living in the home you love to considering your home an investment, which must be managed for the greatest return, is a vital financial mind shift.

3. Be Flexible—it’s a Winning Strategy

Be flexible in pricing your listing:  pay attention to the realities of the real estate market in your neighborhood, and let go of attachment to what you want to believe your home is worth.  Insist on a price that’s too high, and your listing may “sit on the market until a drastic price reduction is the only strategy left.”

4. Take Advantage of the Expertise You Are Paying For

Your real estate professional is trained to analyze real estate data and assist you in arriving at market value for your real estate—that is, what willing buyers will pay when not under pressure.  This is just part of the professional service provided for the commission you are paying.  If you fail to pay attention and take advantage of this professional expertise, you are wasting your money.

5. Pay Attention to the Entire Offer

Remember that there is more to a good offer than just the purchase price.  Ask your real estate professional how to consider how you can benefit by negotiating things like the closing date and the contingencies in the buyer’s offer.

 

Gig Harbor Snapshot

Median home prices are up about 13% over this time last year.

 

LET’S LOOK AT THE NUMBERS

  • According to Realty Times, existing homeowners now account for a larger share of purchases— 44.6% in June—as investor purchases decrease.  A balance of first-time buyers, move-up buyers and investors is a sign that the housing market is beginning to stabilize.
  • The share of distressed properties (foreclosures and short sales) dropped from over 40% a year ago to about 28% in June.
  • Long-term U.S. mortgage rates jumped half a point in May, reflecting consumer confidence in the economy and the very active housing market.  The 30–year fixed rate mortgage averaged 3.81% in May, which was a high not seen in over a year.

What Sellers need to do in this market

Continued low inventory has driven up prices—which is good news for sellers—and has also caused buyers to react quickly to price reductions and new listings that become available—not always good for sellers if a hastily accepted offer falls apart due to buyer’s remorse.  So take the time to carefully consider any offer before accepting it.

What Buyers need to do in this market

There continues to be a lot of competition for homes, so you want to be ready to hit the ground running when you are ready to make an offer.  Keep up with the new listings and price reductions in your price range, and be prepared with a loan pre-qualification letter from your lender.

Should You Buy a Short Sale?

The up side is that a short sale may offer you good value at a great price; the down side is that a short sale transaction takes longer to close—often up to 6-9 months.  If you are not in a rush and are patient with the process, the wait can be worth it.  I am happy to  answer your questions and make my experienced team available to guide you through a short sale purchase.

What Should You  do in this market?

Whether you are a Seller, a Buyer or an Investor, there are lots of good opportunities in today’s market.  I’m always available to consult with you to help you assess and achieve your real estate goals.

Barbara Magnuson

Mobile:  253-307-4505  Fax: 253-857-8700

 

 

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Contact Barb Magnuson

Magnuson Residential & Commercial Properties
Keller Williams Realty - West Sound
11515 Burnham Drive NW, Gig Harbor, WA 98332
(253) 307-4505
(253)851-4511
(253) 857-8700

barbmagnuson@gmail.com

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