December 2014 Market Update
From the Desk of Josh Barker
The Redding real estate market has experienced a good amount of change this past year. Home owners wanting to sell a home in the Redding area are experiencing a much stronger market than in years past. In fact, homes located in popular locations with competitive prices are selling in an average of 30 days or less. The reduction in distressed properties for sale is leading towards a much more stable housing market. Well priced homes and “quality properties” will continue to sell quickly with the right marketing strategy in place. YOU CAN VIEW OUR MARKETING PLAN HERE…INSTANTLY! Enjoy the information and if you have any questions, feel free to contact our office at 530-222-3800.
Merry Christmas & Happy New Year!
Click Here to watch Josh's video blog for the month of December.
4 Reasons to Sell Now
As we discussed last week one reason to sell now is demand is still strong. With inventory levels also still below historic numbers, you could be missing out on a great opportunity for your family.
There Is Less Competition Now
Housing supply just dropped to 5.1 months, which is under the 6 months’ supply that is needed for a normal housing market. This means that, in many areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market.
There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future.
Also, new construction of single-family homes is again beginning to increase. A study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference).
The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.
The Process Will Be Quicker
One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.
There Will Never Be a Better Time to Move-Up
If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 23.5% from now to 2019. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate in the low 4’s right now. Rates are projected to be over 5% by this time next year.
It’s Time to Move On with Your Life
Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.
That is what is truly important.
Where are Prices Headed Over the Next 5 Years?
Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.
Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.
The results of their latest survey
- Home values will appreciate by 4.8% in 2014.
- The cumulative appreciation will be 23.5% by 2019.
- That means the average annual appreciation will be 3.6% over the next 5 years.
- Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 15.1% by 2019.
Individual opinions make headlines. We believe the survey is a fairer depiction of future values.
Harvard's 5 Financial Reasons to Buy a Home
Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. Last year, he released a paper on home-ownership - The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.
Here are the five reasons, each followed by an excerpt from the study:
Housing is typically the one leveraged investment available.
"Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more."
You're paying for housing whether you own or rent.
"Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord."
Owning is usually a form of “forced savings”.
"Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.
There are substantial tax benefits to owning.
"Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.
Owning is a hedge against inflation.
"Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.
We realize that home-ownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially.
Merry Christmas & Happy New Year!