Owners have many options when they decide they’d like to move on from their current home, but fewer are looking to do it alone. According to the National Association of REALTORS® 2015 Profile of Home Buyers and Sellers, only 8 percent of home sales last year were those in which the seller went through the process without an agent – known as for sale-by-owner sales or FSBOs – the lowest percentage since NAR began tracking these sales in 1981.
FSBO sales have dropped 5 percent in the last 10 years, down from 13 percent in 2005. The most common reasons are that sellers didn’t want to pay a commission or fee (48 percent); they were selling to a friend, relative or neighbor (21 %); or they were contacted directly by a buyer (18 %).
As FSBO sales have gone done over the last decade, the use of a real estate agent representing sellers has increased; 89 percent of sellers used a real estate agent – up 1 percent from last year and 5 percent from 10 years ago. Represented sellers agree that they will likely receive a sale price “on the high side” of fair market value when their home receive the greatest level of exposure to the market.
There was a slight uptick in the broad consumer inflation measure in November. More interesting is the housing components, which continue to show high figures. Housing shortage still persists and this condition will jack-up the broad inflation rate in 2016. The Fed then will have to raise interest rates few additional times.
The broad CPI inflation rose 0.4 percent from one year ago, though less than one percent it is the highest of the year. Directionally therefore some upward shift could be developing. One key contributor to the rise is that rents are rising at 3.6 percent and homeowners equivalence rents are rising at 3.1 percent. This high rate is a reflection of housing shortages. Home-builders are still sluggish in putting up new homes so the shortage and high housing costs will likely continue into 2016.
Based on trends and assumption of no further price declines in gasoline prices in 2016, the overall CPI could surpass 2 percent and possibly reach 3 percent. That means, the Federal Reserve will likely raise interest rates two or three times in 2016.
On other matters, don’t smoke. Smoke products are rising by 3.7 percent. Those who have suffer smoke related illness, doctor fees are accelerating, now rising by 3.1 percent. For more serious issues, hospital fees are rising even faster at 4.7 percent.
For holiday shopping, women’s apparel prices are lower this year by 3 percent (no price discount on men’s clothes); while electronic products where prices have fallen by 6 percent.
Homeowners preparing to sell often make improvements to their homes that can help yield positive results in attracting buyers. According to a new report from the National Association of Realtors®, remodeling projects can also bring major benefits to homeowners who choose to remain in their homes.
“Realtors® know that certain home upgrades and remodels can be beneficial to get more buyer eyes on a property, potentially bring in more offers or gain more equity from a home,” said NAR President Tom Salomone,. “But remodeling projects are just as valuable to homeowners who simply want to get more joy out of their dwellings.” Regardless of the situation, Realtors® know what remodeling projects bring the biggest bang for the buck and what projects are most likely to improve a homeowner’s impression of their current place.”
Realtors® named kitchen upgrades and renovations, bathroom renovations and new wood flooring as the interior projects that most appeal to potential buyers. Similarly, Realtors® ranked projects based on expected value at resale, the projects that ranked the highest in this category were complete kitchen renovations, kitchen upgrades, bathroom renovations and the addition of a bathroom.
When looking at the interior projects that yield the biggest financial results upon resale, Realtors® ranked hardwood flooring refinishes (100 percent of project cost recovered upon resale), insulation upgrades (95 percent recovered), new wood flooring (91 percent recovered), and converting a basement to a living area (69 percent recovered) as projects to consider.
Many homeowners are hesitant to list their home in the winter thinking that the cold weather season won’t attract many buyers. But while spring may be the peak home selling season owners getting started by the first of the year may be at an advantage.
The real estate brokerage Redfin found that on average, sellers net more above the asking price during the winter months. Their study found this to be true even in cities like Boston and Chicago and that homes listed in winter tended to sell faster than those in the spring.
One advantage for winter home marketing is the fact that many corporate or professional transfers focus on ‘the new year.’ These transferees are serious buyers and know that properties coming on the market at the first of the year are owned by ‘serious sellers’ motivated to get a jump on the ‘spring market.’
Winter sellers know that inventories of homes on the market tend to be lower in winter and therefore they could be very well facing less competition. They feel that if their home doesn’t attract a buyer they will have the advantage of ‘market feedback’ from agents and buyers and have the time to make recommended condition and price adjustments before the April rush.
Naturally winter buyers will be more focused on issues like heating systems and heating costs as well as supplemental heat sources like fireplaces and wood and pellet stoves.
Home stagers agree that the gray days ahead can leave a gloomy impression and advise sellers to emphasize a sense of warmth inside the home . An added tip is to pay close attention to lighting. It’s advisable to increase bulb wattage and add fixtures in areas that tend to be dark.
At a recent Realtor conference Ed Golding, Assistant Secretary of the Federal Housing Administration announced that FHA will soon be making changes to their policies to ease restrictions on loans for the purchase of condominiums including FHA’s recertification process, owner-occupancy requirements and the decision to make insurance products like polled policies and state run policies eligible under FHA financing.
The National Association of Realtors work closely with the Department of Housing and Urban Development to advocate for changes to the FHA condo policies. Chris Polychron, NAR’s President recently testified on Capitol Hill to highlight the need for changes, including policies related to recertification and owner occupancy requirements.
At the conference Polychron applauded FHA’s leadership for taking action to improve access to credit for condos. He said, “Condos are often the most affordable option for homebuyers, especially first-time buyers, and making sure that FHA financing is an option is important to supporting homeownership. We look forward to working with them again in the future to help more Americans achieve the dream of homeownership.”