Realtors’® Market Predictions for 2015

As we welcome in the New Year, we also welcome more positive predictions for the housing market. After years of slow and steady recovery, in 2014 the U.S economy saw its best year since the 2008 recession. With the economy continuing to show improvement and income levels seeing growth, housing experts and economists have high hopes for 2015. After seeing so much improvement in 2014, the housing market seems poised for a real comeback in 2015. Prospects are looking bright for homeowners and prospective home buyers.

Here are a few trends and predictions the Greater Louisville Association of REALTORS expects to see play out in the coming year.

Lending standards will be loosened. In December 2014, Fannie Mae and Freddie Mac announced they will be offering 3 percent down payment mortgages, rather than 5 percent. Many potential buyers simply do not have the resources to save for a substantial down payment. This new program will allow first-time, creditworthy buyers, who would otherwise be kept out of the market, to purchase a home.

Mortgage rates will go up. With the economy improving, the Federal Reserve has indicated that they will be increasing the federal funds rate in 2015. This rate has a substantial impact on mortgage rates, which have been at historic lows for the past few years. This means that if you are considering buying a home or refinancing your mortgage, now is the time. The rates will likely increase as the year progresses.

Millennials will enter the market. As the economy continues to make gains and the job market improves, millennials (ages 25-34) will start forming households and entering the housing market. Millennials began to enter the market in 2014, but as the job market continues to improve and rent prices continue to rise millennial’s involvement in the housing market will likely increase. Combining that with opportunities for lower down payments, it’s a prime time for young people to enter the market.

Housing inventory will increase. Builders will begin to ramp up production in 2015. This increase in inventory should help improve choices for consumers, another potential draw for first-time buyers.

For more information about the 2015 housing market contact a Realtor^®, whose expertise and local market insights can help make your home or investment dreams happen in the year ahead.

Realtors® Help Buyers Move to New States

Buying a home can be a complicated process, and being an out-of-state buyer can make the process even more challenging. According to the National Association of Realtors^®, while buyers last year moved a median of 12 miles from their previous residence, two in 10 buyers moved more than 100 miles.

Buying a new home and moving is stressful no matter what the situation, but moving to an unfamiliar area or new state adds whole new levels of necessary preparation and expenses. However, with just a bit of planning and a lot of organization, you can make the process substantially easier on yourself.

Here are a few tips from the Greater Louisville Association of REALTORS to help streamline your long distance home purchase and move:

Find a Realtor^®. Whether you are moving across the street or across the country, hiring a Realtor^® is the best move you can make. When you are looking for homes in a new state, having someone familiar with the area, neighborhoods and local market conditions is an invaluable asset. Realtors^® have unparalleled knowledge of their communities and can help you navigate the complex, sometimes overwhelming, process of homebuying.

Establish Timelines. Knowing the day you are moving is just one of many dates you will need to figure out. When do you need to sell your current home? When can you take a trip to the new state to view potential homes? Considering those questions and having a breakdown of what needs to be done and by when will help you prioritize tasks and keep you from scrambling at the last minute.

Tour Potential Homes Online. Traveling back and forth between states to look at homes is time consuming and cost preventative for most, but that shouldn’t prevent you from beginning your home search online. Digital real estate listings on sites like realtor.com^® often include photos and videos guiding you through the home, the same way a Realtor^® would if you were there physically. Though you might eventually have to make a trip out to your new state to purchase your home, touring a few homes online can help you narrow down your choices and save you time and money.

Moving. Long distance moves can be an expensive process, so make sure you ask for estimates from a few moving companies before committing. If you are really hoping to save money a do-it-yourself move might be your best option. Make sure to consider the cost per mile, insurance, gas and taxes when price shopping for a moving truck. And if you have any pets, make sure to research hotels that allow animals or arrange with your airline to have your furry friend travel in the cabin with you.

Homeownership is not only an investment in your financial future, it is an investment in our life in your new home state. Homeowners are more likely to be engaged in local issues and more involved with their neighbors, so work closely with your Realtor^® to find a house that is going to make this new place really feel like home.  Click here for more help.

How to make the best purchase offer in a seller’s market

You’ve worked with a Realtor^® to scour the listings, toured what feels like a million houses and finally found it: the house you want to call home. The next step is to make your purchase offer, and if you are like most people, the prospect can be quite intimidating. In a seller’s market, there can be even more pressure on the buyer to submit an impressive bid. So how can you make sure that the offer you submit is the one that is accepted?

In a seller’s market, home prices are a bit higher and inventory is lower. This means you are more likely competing with multiple bidders. In a competitive market like this, sellers need every advantage they can get, and working with a Realtor^® to make the best purchase offer is a smart move. And, believe it or not, the bid with the highest price is not always the one that wins.

Of course sellers want to get the best price for their home, but that isn’t always the deciding factor. Eliminating or reducing the number of contingencies with your bid, through things like pre-offer inspections, can also help make your offer stronger. The bid that causes the least amount of hassle for the seller is the one that will probably win.

That doesn’t mean, however, that you should just submit a below market offer with no contingencies. This is not the time to make a lowball offer. When you are going up against more than one potential buyer, it’s the time to put your best foot forward. This might be your one chance to convince the owner to sell their home to you, so it’s all the more important to submit your best possible purchase offer.

If you can pay cash for your home, chances are your bid will be accepted. Sellers’ appreciate all-cash offers as they usually mean a quick, streamlined purchase. Financing issues, such as delays in mortgage approval or getting funds moved from the buyer’s bank account, are the primary causes of delays in the closing process. If a seller can avoid a lengthy or complicated process by choosing an all-cash buyer they likely will.

For most people, however, a cash offer isn’t a possibility, and you’ll need to qualify for some variety of mortgage financing. If this is your situation, get preapproved for a mortgage before you begin the search process. With loan preapproval, you’ll be able to make a solid commitment to buy, and your offer will be more appealing to the seller.

And of course, the most important thing that you can do to give yourself an advantage is to hire a Realtor®. Realtors® have real insights and unparalleled knowledge of your local market and can help you navigate the complicated home buying process.   Click here for more.

Sell Your Home This Summer

Selling your home can be no easy feat, especially during the hot summer months.  However, there are a number of reasons that this summer could be the best time to put your house on the market.

According to the National Association of Realtors^®, fifty percent of homes are sold during the summer months. In summer, the frenzy of the spring buying season has ended, so you may have fewer houses to compete with for buyers. Also, potential buyers will have received their tax refund checks by summer and that may be just what they need to pull together a downpayment. Selling in summer also gives families time to settle in before school starts. All of these reasons make summer a perfect time to market your home for sale.

Here are a few tips from the Greater Louisville Association of REALTORS (GLAR) to make sure your house is sold for the best price and in plenty of time for fall:

Air Conditioning. During the summer, your house can become hot and stuffy. Keep the air conditioning at a reasonable temperature; not so cold that buyers will be searching for their jackets, but cool enough that they won’t want to go back into the heat outside.

Summer Plans. Plan your annual vacation in advance so that you can list your home accordingly. Timing is everything when it comes to selling a home, so make sure that when offers start coming in that you aren’t out of town.

Landscaping.  Your front yard is the first thing people notice about your house, so make sure your lawn and flower beds aren’t suffering in the summer heat. Keep the grass trimmed by mowing often, plant fresh flowers and remove any debris from the lawn.  Also, clean your deck, porch, patio or outdoor kitchen and repaint or make any necessary repairs. This is your outdoor space’s chance to shine, so keep it in top condition all season.

Provide Refreshments.  Make sure to greet potential buyers the way you would guests and provide drinks or snacks. During the hot summer days, bring out a cold pitcher of lemonade or a cooler full of bottled water for the buyers. Set out some fruit or other light snacks that are seasonally appropriate. Anything you can do to make visitors linger a little longer could help you sell quicker.

Work with a Realtor^®. Finally, GLAR reminds sellers that all real estate is local, so it’s important to work with a Realtor^® who is familiar with your community. These professionals know the pricing strategies, buyer preferences and marketing approaches that will achieve the best results in your area.

Keeping these tips in mind will help you increase your chances of quickly finding the right buyer for your home this summer.

What do Millennials Want From A Realtor?

The numbers are in and Millennials take the top spot as the largest group of recent home buyers in the U.S. According to the 2014 National Association of Realtors® Home Buyer and Seller Generational Trends study, which evaluates the generational differences of recent home buyers and sellers, Millennials (those age 33 and younger) comprised 31 percent of recent home purchases.

“Millennials are the largest generation in history after the baby boomers, and since many still aspire to one day invest in their future through homeownership, they will drive future housing demand,” said NAR chief economist Lawrence Yun.

Despite having a reputation of not wanting to put down roots, this generation still very much sees homeownership as part of the American Dream. What exactly is this age group – most of whom are likely to start their home buying search online – hoping to gain from working with a Realtor®?

Getting information from the Internet is a lot like trying to take a drink from a fire hydrant. Young buyers are looking to Realtors® to help them understand and interpret all this information, given them insights into everything that goes into the home buying decision, and guide them through the process. This is the largest financial transaction of their lives, so they are looking for someone they believe is honest and trustworthy.

This means that they are most likely to hire their agent based on a reference from a friend or relative. As this is probably their first venture into the real estate market, a recommendation from mom or dad, or perhaps a good friend who just went through the process is going to carry more weight than any online reviews. While Millennials want to enter the market, this generation does face some challenges on their path to homeownership. Twenty percent of Millennials polled said that they would have a hard time saving for down payment, citing student loan debt as their main financial hurdle. That, along with the challenges of tight credit, limited inventory, and the possibility of rising interest rates, can limit the options and ability for young people to own.

However, these issues aren’t changing young buyers’ attitudes about buying a home. This generation truly appreciates the long-term benefits and economic security of homeownership; 87 percent polled say they consider their home purchase a good financial investment. They also understand the issues currently affecting the market, and that they may have to be flexible to make owning their own home a reality.

Realtors® know that younger people often need to make compromises to get into their new home and can help guide buyers to achieving their goal of owning their own property. Desired size and location are usually negotiable when buying a home and most buyers are willing to make financial sacrifices if it means they can make this important investment in their future.

The Help Buyers Need to Navigate Increasingly Tight Market

Spring is traditionally a favorable time of year for home buyers; however, with a limited number of homes available for purchase, sales nationwide are slowing. According to the National Association of Realtors^® housing inventories are near decade lows, and are continuing to pressure home prices.

Recent data shows there is more demand than supply in the current market, which means conditions broadly favor sellers. Meanwhile, buyers are out there looking to purchase homes. Buyer traffic is 25 percent above a year ago and sellers are reportedly receiving multiple bids. The good news for buyers is home construction is rising and low mortgage rates are keeping housing affordable. However, underwriting standards remain excessively tight.

NAR data shows that total housing inventory at the end of March is 1.93 million existing homes available for sale, which represents a 4.7-month supply at the current sales pace. NAR Chief Economist Lawrence Yun stressed the need for a housing supply of over 6 months to have a generally balanced market between buyers and sellers. The current supply of homes for sale is 17 percent below year-ago levels, according to NAR data, and homes are also selling much faster. The typical home sold in March was on the market for one month less than it took to sell a year ago. The median time on market for all homes was 62 days in March down from 74 days in February.

Despite these conditions, homeownership remains desirable to many renters.  The benefits of homeownership are still very evident and opportunities for buyers exist. Just because the current market tends to favor sellers doesn’t mean buyers can’t still find their dream home.

There are several tips for buyers in today’s market. First, before you start looking at potential homes, know your budget. Lenders will evaluate your income, savings and credit history to qualify and approve you for a mortgage.  Antoher tip is identifying neighborhoods of interest. Also, think about what you need and want in a home, whether it’s a certain number of bedrooms, a small yard, or a garage. Once you have a good idea about what you’re looking for, it’s easier to know it when you see it.

When homes are selling quickly it’s important for buyers to visit the home as close to when it goes on the market as possible. Open houses are also a great way to see a lot of houses in a short amount of time. Buyers can get a good sense of what’s available in the area and what their budget can afford.

Most importantly, start working with a Realtor^®. Whether you are buying or selling a home, using a Realtor^® is a smart move. Realtors^® understand their local markets and can negotiate on your behalf. Buying and selling a home is one of life’s biggest decisions and a Realtor^® can guide you through the process.

Whether you’re ready to buy or looking to sell, consumers can find tips and advice for making the most of their open house experience at http://inr.synapticdigital.com/nar/openhouses/.

Six reasons to reduce you home price

While you’d like to get the best price for your home, you might want to consider our six reasons why you should reduce your home price. 

1. You’re drawing few lookers.

You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your REALTOR reports there have been fewer buyers calling about and asking to tour your home than there have been for other homes in your area, that may be a sign buyers think it’s overpriced and are waiting for the price to fall before viewing it.

 2. You’re drawing lots of lookers but have no offers.

If you’ve had 30 sets of potential buyers come through your home and not a single one has made an offer, something is not right. What are other agents telling your REALTOR about your home? An overly high price may be discouraging buyers from making an offer. 

3. Your home’s been on the market longer than similar homes.

Ask your REALTOR about the average number of days it takes to sell a home in your market. If the answer is 30 and you’re pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there’s something wrong with it, which can delay a sale even further. At least consider lowering your asking price.

 4. You have a deadline.

If you’ve got to sell soon because of a job transfer or you’ve already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It’s not how much money you need that determines the sale price of your home, it’s how much money a buyer is willing to spend. 

5. You can’t make upgrades.

Maybe you’re out of cash and don’t have the funds to put fresh paint on the walls, clean the carpets and add curb appeal. But the feedback your agent is reporting from buyers is that your home isn’t as well appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it’s time to accept that buyers expect to pay less for a home that doesn’t show as well as others. 

6. The competition has changed.

If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what’s still on the market? What new listings have been added since you listed your home for sale? If comparable home sales or new listings show your price is too steep, consider a price reduction. 

For more useful information about selling your home, keep checking back here.

First-time buyer’s guide

Buying a home for the first time can be quite the experience. Whether it’s choosing the right location, establishing a proper budget or even choosing the right real estate agent, it can all be a bit much. Fortunately, local REALTORS® are available to help guide new home buyers through the tricky and sometimes tedious process.  

Step number one, before even looking for a dream home, is to get prequalified for a mortgage. Prequalifying shows the REALTORS® and the rest of the market that this is a serious hunt for a house. Check on credit scores, current budget and long-term goals before applying for prequalification.  

First-time home buyers also face an uneasy road when it comes to location. Many may be in a new town or are moving from a rental property. While they may understand mortgage payments, this may be their first time with insurance, upkeep and everything that comes with actually owning a house.   

Deciding where a long-term investment will pay off is key. Is it the up and coming neighborhood, or a long-standing traditional neighborhood? A REALTOR® will listen to the needs of the buyer and knows the city inside and out, which allows them to find the right home.   

Check out more great tips from REALTORS® by contacting your REALTOR today.

What is P.I.T.I?

When you’re buying or selling a house, there are many terms that come up. Though your local REALTOR can guide you through much of the terminology, there are some terms that you should be familiar with, and PITI is one of them. You will see PITI associated with your loan documents and mortgage paperwork. The following is an explanation of the term and the meaning of each of its letters. 

P is for Principal
The principal is the total base amount of money that you are borrowing to buy your home. The principal is generally the biggest portion of the PITI figure.

I is for Interest
Whenever you borrow money or pay on credit, you have to pay an interest charge. The interest is usually calculated as a percentage and appears as an amount on the PITI breakdown. Depending on the deal you have, the interest rate can stay fixed for the term of the loan or it can be variable.

 T is for Taxes
Taxation is one of the eternal certainties of life! Taxes involved with home ownership typically go to governments at the local level to pay for public services. The tax amounts are typically included with the monthly mortgage prorated. The lender pays the tax on your behalf to the local government.

The other I is for Insurance
Your home is one of the biggest investments you will make, and a homeowner’s insurance policy is vital for your financial well-being. There are various policies from which you can select, but the choices available to you depend on how much money you put down on your property. If you make a down payment of less than 20%, lenders require that you purchase private mortgage insurance (PMI).  This protects the lender in the event of loan default or foreclosure. Similar to the way it is with taxes, these payments are generally added into your total mortgage payment.

Need more help?  Contact a local REALTOR!