If you are buying or selling a home right now, you will have a great opportunity this weekend to take advantage of the increased visibility being offered by the National Association of Realtors International Open House Weekend. Even with lower inventory nationwide, demand is high and this is shaping up to be one of the largest Open House Weekends ever. While most people begin their search on the Internet and 46% of buyers found out about open houses through Internet searches, high quality videos and pictures can’t convey how a home smells or feels. According to NAR’s 2012 Profile of Home Buyers and Sellers, 45% of all buyers used open houses as a source in their home search process. Open houses often attract potential buyers who might otherwise be too casual or unmotivated to book a showing, giving these people a chance to browse without too much pressure.
Here are some more open house facts from NAR’s Profile of Buyers and Sellers:
- Repeat buyers are more likely to find their home from an open house than first-time buyers, and repeat buyers use open houses more frequently.
- Mid-income buyers (between $55,000 and $75,000) are most likely to find their home through an open house compared to those in other income brackets.
- As age increases, the likelihood of using open houses as a search tool increases—45% of buyers 45 to 64 used open houses compared to only 28% of buyers aged 18 to 24.
- New home buyers use open houses more than buyers of previously owned homes.
- Married and unmarried couples are more likely to use open houses than single buyers.
This week’s Real Estate Insight:
Work with your Realtor to make sure your home is looking its best, showcasing the features that are most appealing to buyers. Buyers are likely to visit several houses in the same general location, so you need to make sure your home stands out from the crowd. You want your home to be the most memorable, the brightest, most spacious and cheerful home they visit. Check back here Thursday afternoon to see the properties that will be open this weekend.
Are you planning to wait until spring to begin your search for a home? Although spring is the classic time of year to buy, you may want to consider the following before deciding to postpone your purchase.
Right now, the most compelling reason to jump into the housing market is the mortgage interest rate, now at all time lows. Smart buyers think in terms of monthly payments and the long term cost of a loan in addition to the purchase price. Currently, interest rates are the lowest they’ve been in over 50 years, at fixed rates of 4.17%. According to the National Association of Realtors’ Chief Economist, Lawrence Yun, “ Economists are predicting a rise to 5% or 5.5% in the course of the next year.” That translates to almost $2,000 a year or $57,975 over the life of $200,000, 30-year fixed rate loan. The risk of rates increasing seems to overshadow the risk of prices falling further.
In addition to interest rates being a major factor, there are a few other determinants to consider. Inventory is plentiful. Nationally, there is a 10–12 month supply of homes on the market, which is considered high. A six month supply is thought to be a balanced market and is historically the average. We are tracking the national figures.
Prices are the final factor. “Median prices are lower than they were,” says Lawrence Yun, “and economists expect increases in values during the next twelve months.” In the Rhode Island market, the median price hit a low in quarter two of 2009 and re-hit that value in Q1 of 2010, but has risen slightly over the last two quarters. While predicting the future is impossible, it does seem like we are at a bottom as the experts are saying.
Considering all factors — the large selection of homes available, a price to value ratio, and especially the cost of your monthly payment, you may find this is the perfect time to start buying your home.
Everyone is asking the questions “How is the housing market fairing these days, and what are the trends for the future?” Those are always good questions to which one would like to know the answer, especially the latter. So, with that in mind, I searched for some interesting tidbits on the National Association of Realtors’ site. NAR has a weekly update on the economic indicators and publish this on Facebook.
In their latest release, here are some interesting facts – some of them one would expect. For instance, new mortgage applications and purchase contracts have fallen in May. This is most likely due to the surge in applications through April 30th. Sales of furniture and home improvement products have increased in May while overall consumer spending has gone down some, a possible secondary effect of the tax credit legislation.
But here is an interesting piece of information from this week’s report. The number of buyers that may not get the tax credit due to failure to close by the 30th of June deadline because of an excessive workload is estimated to be as high as 180,000 nationally. The number is so large that legislators are pushing a bill to extend the closing date deadline to the 30th of September. Short sales seem to be playing a part in this. No one is sure how this is going to affect the market.
Interesting trivia? Certainly. Economic trends? Maybe. While the overall sentiment and data are pointing to an interesting time ahead, there seems to be one constant over the years in economic cycles. The economy recovers when everyone thinks there is a recovery brewing.