Real Estate: This Spring Will Be Different

Just like May flowers, every spring the housing market blossoms as buyers come out ready to purchase their dream house. This spring, we believe we are going to see the strongest purchasing market we have seen in a decade.
Why are we so bullish on the housing market this spring?
Here are a few reasons:

MILLENNIALS 

Contrary to many reports, this age demographic is READY, WILLING and ABLE to become homeowners. As a matter of fact, the latest National Association of Realtors’ gender study revealed that the Millennial generation has recently accounted for a greater percentage of all buyers than any other generation.

BABY BOOMERS

As prices have risen, so has the equity in many homes across American. Homeowners, having been shackled to their house because of low or negative equity for the last several years, are again free to make a move without worrying about bringing cash to a closing table in order to sell. We believe this new-found freedom will release a pent-up demand of sellers who want to move-up to the home they’ve always dreamed of or want to downsize their primary residence and also purchase a second home they can use for vacation, retirement or both.

BOTH PRICES and MORTGAGE RATES are on the RISE

As the economy improves, more and more Americans are regaining faith that their own
 personal finances are headed in a positive direction. With this new confidence, they want to take advantage of the opportunity that presents itself with real estate still undervalued in most parts of the country and mortgage rates being well below historic numbers.

Want to Sell Your House? Price it Right!

The housing market is recovering nicely. Prices have increased nationally by double digits over the last twelve months. Competition from the shadow inventory of lower priced distressed properties (foreclosures and short sales) is diminishing rapidly. Now may be the perfect time to sell your home and move to the dream house or beautiful location your family has always talked about.

The one suggestion we would definitely offer: DON’T OVERPRICE IT!!
Even though prices have increased by more than 10% over the last year, the acceleration of appreciation has slowed dramatically over the last few months. As an example, in their April Home Price Index Report, CoreLogic revealed that home prices actually depreciated by .08% this month as compared to last month’s report. What concerns us is that Trulia just reported that asking prices are still continuing to increase.

Because investor purchases are declining and there are more listings coming onto the market, we believe that sellers should be very cautious when they price their house. The alternative might be that you could lose money by overpricing your home at the start as explained in a research study on the matter.

Bottom Line
Though it is a great time to sell your house, pricing it right is crucial. Get guidance from a real estate professional in your marketplace to ensure you get the best deal possible.

Eisenberg: Economic indicators positive - Baton Rouge, LA

While economist Elliot Eisenberg—keynote speaker for today's TRENDS in Real Estate Seminar—enthusiastically called the state of the Louisiana and Baton Rouge economies a "happy story," he warned that the energy boom won't last forever. "You know it will end," Eisenberg told those gathered this morning at the BREC Independence Park Theatre for the half-day seminar. "Energy booms always end. I would try and plan for what happens the day after. Lafayette in '86 wasn't a happy place, remember that. Nothing good lasts forever. Don't say this time will be different, because it won't be different." Still, Eisenberg detailed a mostly optimistic outlook for the state and Capital Region, celebrating the the area's low unemployment rate, labor force growth—which is above the national average—and 5% increase in home prices since last year. "You're a happy city and a happy state, you really are," said Eisenberg, a nationally acclaimed economist and speaker based in Washington, D.C. By contrast, he noted, the national economy is improving, but at a slower pace than has been seen locally. Crediting less economic uncertainty and increased capital expenditures, Eisenberg said we are now entering the "pleasant phase of the recovery." "Overall, the economy really is improving," he said, adding that he expects "interest rates will go up because of it." The 26h Annual TRENDS in Real Estate Seminar, hosted by the Greater Baton Rouge Association of Realtors Commercial Investment Division, kicked off this morning with Eisenberg's keynote address and will continue through noon. With roughly 680 registered to attend, this will be the largest TRENDS seminar since 2006, according to GBRAR Communications Director Saiward Pharr Hromadka. Read Daily Report PM later today for more coverage from the seminar. —Rachel Alexander

3 REASONS TO SELL YOUR HOME THIS SPRING

 
3 REASONS TO SELL YOUR HOME THIS SPRING

Many sellers are still hesitant about putting their house up for sale. Where are prices headed? Where are interest rates headed? These are all valid questions. However, there are several reasons to sell your home sooner rather than later. Here are three of those reasons.

1. DEMAND IS ABOUT TO SKYROCKET
Most people realize that the housing market is hottest from April through June. The most serious buyers are well aware of this and, for that reason, come out in early spring in order to beat the heavy competition. We also have a pent-up demand as many buyers pushed off their home search this winter because of extreme weather. These buyers are ready, willing and able to buy…and are in the market right now!

2. THERE IS LESS COMPETITION - FOR NOW
Housing supply always grows from the spring through the early summer. Also, there has been a growing desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners have seen a return to positive equity as prices increased over the last eighteen months. Many of these homes will be coming to the market in the near future.

The choices buyers have will continue to increase over the next few months. Don’t wait until all the other potential sellers in your market put their homes up for sale.

3. 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 approximately 4% this year and 8% by the end of 2015. 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 at about 4.5% right now. Freddie Mac projects rates to be 5.1% by this time next year and 5.7% by the fourth quarter of 2015.

Moving up to a new home will be less expensive this spring than later this year or next year.

 

225-315-9003

Christiefarris@gmail.com

A Home's Cost VS. Price

Let's talk about the difference between COST and PRICE. As a home seller, you will be most concerned about ‘short term price’ – where home values are headed over the next six months. As either a first time or repeat buyer, you must not be concerned about price but instead about the ‘long term cost’ of the home. Let us explain.

Recently, it was reported that a nationwide panel of over one hundred economists, real estate experts and investment & market strategists projected that home values would appreciate by approximately 8% from now to the end of 2015.

Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30 year fixed mortgage rate will be 5.7% by the end of next year!

What Does This Mean to a Buyer?

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

 

New homes in Baton Rouge means the economy is improving

BATON ROUGE, LA (WAFB) -
Homeowners are seeing their homes sell quickly in Baton Rouge.  Realtors say there are only a certain amount of homes on the market, now developers are cashing in by building new options.
One of those new neighborhoods, Magnolia Lakes, off Burbank Drive is where workers are hammering, sawing and framing homes.

"You're probably looking close to $225,000 to $250,000 for a newer house," even at that amount, you may only be looking at a little square footage. Buyers are likely to find more space in older, updated homes.  But there are some who prefer new builds.  In general, homes are on the market for about five months. That means what's available is dwindling.

"So somewhere we've got to get more inventory.  That's where new construction comes in.  That's where you're seeing so much new construction." With a stronger economy, there are now more people working and they are in a position to buy.  That has developers looking for land to clear, to build on.  For example, there are 80 acres off the Millerville exit where trees have been cleared for apartments and office space.

The Baton Rouge Area Chamber has predicted more jobs for the parish this year.  That job growth, is what real estate agents say builders are banking on, to move their product.  As far as how the new stock will affect market pricing, Wattam says Baton Rouge is experiencing what's called a level market. "Buyers are going to get a good value.  Sellers are going to get what they want for their house.  Those days of coming in $60,000 under, those days are gone." Agents say they are hearing interest rates are going up later this year.

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

The latest survey was released last week. Here are the results:

• Home values will appreciate by 4.5% in 2014.
• The average annual appreciation will be 3.94% over the next 5 years
• The cumulative appreciation will be 19.7% by 2018.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of almost 11% by 2018.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

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Buying a Home? Should you do it Now or Later?

Buying a Home? Should you do it Now or Later?

Last month, the Federal Reserve, in a unanimous vote, decided to further decrease its bond purchasing. The bond purchases were the government’s stimulus package created to keep long term mortgage interest rates artificially low in order to help drive the housing market. Most experts believe that tapering will cause interest rates to increase as we move through the year.

Interest rates have remained relatively stable since the onset of the tapering in December. This is probably because the first round of increases had already been ‘priced into’ the equation last summer when rates skyrocketed by over a full percentage point just on the speculation that tapering would take place later in 2013.

However, as we move forward, most analysts believe rates will start to rise culminating in a rate close to a full percentage point higher than current rates by this time next year. For example, Freddie Mac, Fannie Mae, The Mortgage Bankers’ Association and the National Association of Realtors have all recently projected rates to be between 5-5.4% at this time next year.

Bottom Line

If you are a first time buyer or a move-up buyer, the cost of the mortgage on your new home will probably increase as we move through the year. If the timing makes sense, buying sooner rather than later may save you a substantial amount of money over the long term in lower mortgage payments.

5 Reasons you Shouldn't For Sale By Owner

Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). We think there are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

 

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO.

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies which work for the buyer and will almost always find some problems with the house
• The appraiser if there is a question of value
• Your bank in the case of a short sale                                                        

 

2. Exposure to Perspective Purchasers

Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

 

3.  Results Come from the Internet

Where do buyers find the home they actually purchased?

• 43% on the internet
• 9% from a yard sign
• 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

 

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

 

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000.   This doesn’t mean that an agent can get $46,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

 

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Biggest Home Seller Mistakes

Two Things you Don't Need to hear from your Listing Agent

You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:

1. Set the market value on possibly the largest asset your family owns (your home)
2. Set the time schedule for the successful liquidation of that asset
3. Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family in order to garner that degree of trust.  Make sure this is the case.
Be careful if the agent you are interviewing begins the interview by:

• Bragging about their success
• Bragging about their company’s success

An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house. However, you first need to know they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important.
Look for someone with the ‘heart of a teacher’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home. Not someone only interested in trying to sell you on how great they are.

You have many agents from which to choose. Pick someone who truly cares.

Home Sales Reach 7 Year High

There are many naysayers declaring that the housing market is still challenged.
Young adults are burdened with too much student debt. Interest rate increases are killing demand. Homeownership is no longer seen as part of the American Dream.

We just want to let these naysayers know three things: 13,945 houses sold yesterday, 13,945 will sell today and 13,945 will sell tomorrow. 13,945!

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. According to the report, there were 5.09 million homes sold in 2013. Divide that number by 365 (days in a year) and we can see that, on average, almost 14,000 homes sell every day.

NAR revealed that sales had increased 9.1% as compared to 2012 and that it was the market’s strongest performance since 2006.

We realize that these numbers are below the record for homes sold during the boom. We also know that we may not see those numbers again for a long time (and that is probably a good thing). But to say that the current real estate market is challenged is totally inaccurate. We have about 14,000 pieces of evidence to prove that.

   

Baton Rouge Area Home Sales Rise 15%

Baton Rouge metro area home sales increased by 15 percent during 2013, continuing a steady recovery from the national recession that followed a spike in sales after Hurricane Katrina.

According to figures provided by the Greater Baton Rouge Association of Realtors, there were 8,690 closed sales in 2013, compared with 7,483 in 2012.

Though 2013 doesn’t rival the Hurricane Katrina-aided years from 2005 to 2007, last year fell only 59 houses shy of the 8,749 sold pre-Katrina in 2004 in the Capital Region.

Sales fell from 2008 to 2010 before starting a recovery from the national recession.
Home sales picked back up really strong, interest rates are staying low, and that’s really helped the market. Locally, it remains a seller’s market because of the limited inventory.

At the end of 2013, there were 3,896 homes for sale, down 2.6 percent from the 3,999 listings at the end of 2012. That dropped the supply of homes from 6.1 months at the end of 2012 to 5.4 months in December 2013. For all of 2013, the number of days a home remained on the market dropped by 11.3 percent, from 97 to 86.

Annual sales increased by 18.5 percent in Livingston Parish, where there were 1,475 sales in 2013, compared with 1,245 in 2012. Not only have sales come up, quantity-wise, but the values of the homes sold have raised. Homebuyers have been attracted to moving into Livingston Parish because infrastructure improvements such as the widening of Interstate 12 and the Magnolia Bridge have made it easier to get to work at the chemical plants in north Baton Rouge and Ascension Parish.

Ascension Parish had a 17 percent increase in sales, going from 1,425 in 2012 to 1,667.

Ascension Parish had a good spring and a good summer and went through quite a bit of inventory. Gautreau said sales started to slump at the end of 2013 because of dwindling inventory, a slight increase in interest rates and concern about dramatic hikes in flood insurance rates.

East Baton Rouge Parish, the largest homebuying market, went from 4,124 sales in 2012 to 4,698, a 13.9 percent increase. Neighborhoods around LSU and Town Center remained popular with homebuyers, along with Central.

The median sale price for a home in metro Baton Rouge increased by 4.2 percent during the year, going up from $167,000 to $174,000. That’s a local record for the median sale price of a home, said Saiward Pharr Hromadka, a spokeswoman for the Greater Baton Rouge Association of Realtors.

The median means half the homes sold for more than that amount and half for less.
So far, 2014 is off to a good start, because historically low interest rates are continuing.

Prediction: 2014 the 'Year of the Big Move'

Daily Real Estate News | Tuesday, January 14, 2014 

 

Charlie Young, president and CEO of ERA Real Estate, says that several factors in the housing market point to a growing trend of relocation in the new year. More people may be prompted to relocate to areas that offer better costs of living, making 2014 the “year of the big move,” he says.
Here are some factors he points to:

• Rising mortgage rates: Mortgage rates are expected to nudge higher this year from their historical lows as the Federal Reserve starts tapering its bond-buying stimulus program. “For many would-be homebuyers, an increase of 1 percentage point could make monthly mortgage and interest payments in their current area beyond their reach,” Young says. 

• Dropping affordability: Incomes are not keeping pace with the rises in home prices. “That means homes are getting more expensive faster than our wages can keep up,” Young says. With higher mortgage rates and higher home prices, affordability is falling in many higher-priced markets, he notes. 

• Returning equity: As home prices have risen, many home owners have seen equity return and are finally in a position where they can move again. More home owners may look at other states for a lower cost of living, better job opportunities, and better weather, too, Young says. 

• Rebuilding personal wealth: Many people faced a big hit to personal wealth during the recession and as they rebuild it, they may find that their current area has too high of a cost of living to rebuild comfortably.

#1 Reason You Should Sell Your Home Now

The price of any item (including residential real estate) is determined by ‘supply and demand’. If many people are looking to buy an item and the supply of that item is limited, the price of that item increases.

According to the National Association of Realtors (NAR), the supply of homes for sale dramatically increasing every spring. Putting your home on the market now instead of waiting for the increased competition of the spring might make a lot of sense.
Buyers in the market during the winter months are truly motivated purchasers. They want to buy now. With limited inventory available in most markets currently, a seller will be in a great position to negotiate.

November/December 2013 Market Pulse

November/December 2013 Market Pulse

Pent-up buyer demand may lift the market soon, but for now interest rates and lending standards are holding down home sales as the year winds to a close.

 Rising interest rates and continuing tight underwriting could dampen sales as the year winds down. Still, 2013 sales will be up significantly from 2012. Appreciation remains robust, largely because of tight inventories. Interest rate concerns are reducing practitioner confidence. One bright spot: pent-up buyer demand by young households. As adults under 35 start to move out of their parents’ homes, home sales stand to benefit. All trend lines are from August 2012 to August 2013.

  

 Existing-home sales is a seasonally adjusted annual rate, which is the actual rate of sales for the month, multiplied by 12 and adjusted for seasonal sales differences. Pending home sales is an index that measures -housing contract activity. An index of 100 is equal to the level of activity during 2001, the benchmark year. Price indicates the national median. Inventory measures the number of existing homes on the market at the end of the month. Buyer and seller traffic, current conditions, six-month expectations, and time on market derive from a monthly REALTOR® Confidence Index. Results for August are based on 3,171 responses to 6,000 surveys sent to large and small real estate offices. The survey asks practitioners to indicate whether conditions are strong (100 points), moderate (50), or weak (0). Some data may be revised from previous issues.

Capital Region home sales up 3.6% in November

Home sales in the eight-parish Capital Region were up 3.6% in November compared to the same month last year, according to the latest monthly sales report from the Greater Baton Rouge Association of Realtors, released today. While the entire region tallied 20 more homes sold during November—for a total of 577—East Baton Rouge Parish recorded 52 fewer sales, or a decline of 15.2%. A total of 291 homes were sold in the parish last month. Livingston and Ascension parishes performed much better. The 119 sales recorded in Livingston represents a 38% increase over the 86 sold last November. In Ascension, sales in November totaled 108, a rise of 42% over the 76 sold during the month last year. Meanwhile, the average sales price in the Capital Region declined 3.7% in November to $197,848—down from $205,357 in November a year ago. The number of homes for sale in the eight-parish region dipped 5.2% on the month to 4,103; while pending sales rose 21% to 654. The months supply figure, or the number of months it would take to sell all of the homes for sale at the current sales pace, declined 15% to 5.7 months. Realtors generally view any reading under 6 months as reflective of a seller's market. Last November the months supply was 6.7.

Do you know what your home is worth?

Do you know what your home is worth?
While there are Websites that will provide you with an estimated value of your home, the only way to truly determine your home’s value in today’s market is to monitor the home sales that are actually occurring in your neighborhood right now.
As your local real estate expert, I have the systems in place to constantly monitor what’s happening in our local market. I also have the inside scoop on the homes that are currently for sale or recently sold in your neighborhood, including, days on the market and sales price, and how these homes compare in value to yours! Remember, your neighbors might tell you what they’re house is listed for, but they might not share the most important number – what they actually SOLD it for!
Contact me for a listing of the most recent real estate activity in your neighborhood. Much like tracking the value of your 401K or your stock portfolio, in today’s market, it’s more critical than ever that you stay aware of the value of your home – likely one of your biggest financial investments!


Sincerely,
Christie Farris
christiefarris@gmail.com

5 REASONS TO SELL BEFORE SPRING - CHRISTIE FARRIS, BATON ROUGE REALTOR

5 REASONS TO SELL BEFORE SPRING

Many sellers feel that the spring is the best time to place their home on the market as buyer demand increases at that time of year. However, the fall and winter have their own advantages. Here are five reasons to sell now.

Only Serious Buyers Are Out

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere 'lookers'. The lookers are at the mall or online doing their holiday shopping.

There Is Far Less Competition

Housing supply always shrinks dramatically at this time of year. The choices for buyers will be limited. Don't wait until the spring when all the other potential sellers in your market will put their homes up for sale.

The Process Will Be Quicker

One of the biggest challenges of the 2013 housing market has been the length of time it takes from contract to closing. Banks have been inundated with both purchase and refinancing loan requests. Both of these will slow in the winter cutting timelines and the frustration these delays cause both buyers and sellers.

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 25% from now to 2018. 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 historically low interest rates right now. There is no guarantee rates will remain at these levels in years to come.

It's Time to Move On with Your Life

Look at the reason you decided to sell in the first place and decide 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?
You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. 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.