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.
The following is a letter to members of Congress regarding pending tax reform legislation from the National Association of Realtors.
To Members of Congress
Re: Provisions to Improve Tax Reform for Homeowners As a REALTOR and your constituent, I urge you to push the House-Senate Conference Committee on the tax reform bill to strengthen the protections for consumers and homeowners. Building on the progress of the Senate bill, please support the following provisions for inclusion in the final legislation:
Mortgage Interest Deduction: Retain current law to maintain a total cap of $1 million on primary first and second homes.
Capital Gains Exemption: Retain current law of exempting gains of up to $250,000 for single filers and $500,000 for joint filers for primary residence lived in for two of the past five years of ownership.
These provisions would add needed protection to current and future homeowners and strengthen the ability of qualified American families to purchase a home. Please add these provisions to protect middle-class homeowners and the American Dream of homeownership.
The National Association of Realtors is urging its members to oppose the Tax Cuts and Jobs Act, tax reform legislation being considered in the United States Senate. This bill is a direct threat to consumers and homeowners. Not only will millions of homeowners not benefit from the proposal, many will get a tax increase. Additionally, homeowners could lose substantial equity from the more than 10% drop in home values likely to result if the bill is enacted.
The legislation includes changes to the exemption on capital gains tax from the sale of a primary residence, elimination of the deduction for all state and local taxes, and elimination of the deduction for interest on home equity loans. All this from a bill that is supposed to improve the current tax system.
Not only is this legislation a clear and present danger to American homeownership, it will cost our children and grandchildren $1.5 trillion in new federal debt.
In 2018, anticipate home-building will shift to the suburbs, according to a forecast recently released by Zillow. Cheaper construction costs, coupled with demand for entry-level homes, is expected to lead to increased inventory in the suburbs.
“We’re on the other side of the housing recovery, and the real estate market looks quite different than it did 15 or even five years ago,” says Dr. Svenja Gudell, chief economist at Zillow. “We have a huge generation entering the market. They really want to be homeowners, and they’re faced with an inventory crisis that leaves them with few options. Builders won’t ignore this hungry market, and we’ll start to see a rise in new construction at the more affordable end, instead of all the luxury buildings we’ve seen lately.
“However, builders are also facing high costs, so instead of adding density in cities where zoning laws and land costs often preclude affordable building, we’ll see the suburbs grow and expand outward.”
Inventory is currently down 12 percent year-over-year. If builders follow the forecast, millennials in need of options and reasonable prices will make their way out of cities and into the suburbs.
Housing prices have returned to the “boom levels” of a decade ago, but this time around, the fast appreciation is being fueled by strong supply-and-demand dynamics rather than predatory lending practices, investor speculation, and too much construction, according to new realtor.com® data released Monday.
“As we compare today’s market dynamics to those of a decade ago, it’s important to remember rising prices didn’t cause the housing crash,” says Realtor Chief Economist Danielle Hale. “It was rising prices stoked by subprime and low-documentation mortgages, as well as people looking for short-term gains—versus today’s truer market vitality—that created the environment for the crash.”
The national median price for a home in 2016 was $236,000—2 percent higher than in pre-recession 2006—according to realtor.com®. Out of the country’s 50 largest housing markets, 31 have returned to their levels during the last housing bubble. Realtor.com® researchers finger Austin, Texas, as the city that has posted the largest increases in home prices—63 percent—over the past 10 years. Denver and Dallas have also seen some of the biggest gains, at 54 percent and 52 percent, respectively. On the other hand, three markets remained more than 20 percent below their 2006 highs: Las Vegas (25 percent below); Tucson, Ariz. (22 percent); and Riverside, Calif. (22 percent).
The steadily improving U.S economy, sustained job growth, and rising confidence that now is a good time to buy a home should pave the way for an increase in existing-home sales in 2018. That is according to comments from Lawrence Yun chief economist for the National Association of Realtors® on how to ensure more creditworthy households can enjoy the personal and financial benefits of owning a home.
“Despite considerable demand all year, pending sales have lost a step in recent months because low supply is pushing prices higher and making home buying less affordable in several parts of the country,” said Yun.
With a few months of data remaining in 2017, Yun estimates that existing-home sales will finish at a pace of 5.47 million – the best since 2006. (6.47 million), but only a modest improvement from 2016. In 2018, sales are forecast to expand 3.7 percent to 5.67 million. The national median existing-home price is expected to rise to around 5.5 percent this year and next year.
Autumn began in September, but activity in the housing market remained at summer-like levels through October, according to Realtor.com®’s latest data preview. Prices in October were 10 percent higher than those one year ago, with the national median at $275,000 and the national median age of inventory at 73 days.
“This month we aren’t just experiencing still-summery weather—we’re also seeing a sizzlingly competitive housing market at a time when things are usually cooling off for the fall,” says Danielle Hale, chief economist at realtor.com. “With not enough homes on the market to meet the high demand, homes are selling 8 percent more quickly than a year ago even though prices are as high as they’ve ever been.
“For potential buyers who waited until fall hoping to score a bargain, the pickings are disappointingly slim,” Hale says, “but one potential bright spot for market-fatigued buyers is that new listings are up slightly from one year ago. While new listings declined in the first four months of the year, they have increased on a year-over-year basis in five of the last six months.”
Home-building activity tumbled in September, with housing starts down according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development. Single-family housing starts decreased 4.6% to 829,000.
“We are seeing the hurricanes take a toll on single-family production, but builder confidence is strong and production should bounce back as the recovery process gets underway,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB).
“Looking at historical data, there is a pattern of decreased production immediately following natural disasters, but economic fundamentals will drive the longer-term trend in housing starts,” said Michael Neal, senior economist at the NAHB.
“At first glance, September’s construction data showed a slip in total housing permits authorized and an increase in total housing units started, but digging deeper shows a more positive picture for potential homebuyers,” says Danielle Hale, chief economist for realtor.com®. The drop in permit data was driven by a decline in multi-family permits, while single-family permits—which more directly affect the inventory of homes for sale—were up from a year ago. “New construction will eventually lead to more options for buyers, who continued to run up against the lack of homes on the market.”
Source: U.S. Census Bureau
The National Association of Realtors knows the complexity of the current tax system and seeks to assure that tax reforms support the goals of homeownership and freedom to buy, maintain and sell real estate.
Under current tax law, homeowners are allowed a deduction for mortgage interest paid on mortgage debt of up to $1 million, and is available for interest on mortgages for a principal residence and one additional residence. The $1 million limitation represents the combined allowable debt on two residences.
Tax reform has been near the top of the legislative agenda for several years now, even though that term has a generally different meaning for Republicans and Democrats. As part of its budgets for several years, the Obama Administration proposed reducing the value of all itemized deductions, including the mortgage interest deduction for higher-income taxpayers.
However, in mid-2016 congress released a comprehensive tax reform plan known as the “Blueprint.” The Blueprint would almost double the standard deduction and eliminate the deduction for state and local taxes paid, along with other itemized deductions, except the MID and the deduction for charitable contributions. The effect of this plan would be an 85 percent reduction in the benefit of the mortgage interest deduction, along with a 100 percent reduction in the property tax deduction.
Now that President Trump has endorsed most of the goals and major provisions of the Blueprint plan, including the ones that would most endanger the mortgage interest deduction, REALTORS® are on high alert that tax reform could threaten most of the tax benefits of homeownership.
The U.S. jobs market lost ground in September in the wake of hurricanes Irma and Harvey, which slammed the Gulf Coast region and Southeast Texas within two weeks of each other, the U.S. Department of Labor reported.
The unemployment rate fell to 4.2 percent in September however the overall number of people classified as unemployed also declined. Over the last 12 months, an average of 172,000 jobs have been added each month.
“The key statistic in the September jobs report is the fact that wages grew 2.9 percent ,” said Lawrence Yun, chief economist for the National Association of Realtors. “The tightening labor market, with unemployment at 4.2 percent and the number of job openings at high levels, assure more wage gains in the near future.”
Employment in the construction industry was little changed, but some economists believe that the construction industry’s employment numbers will be boosted in the coming months in response to the hurricanes. Yun said the construction workers will likely be drawn away from needed new-home construction projects to respond to the demand in hurricane-affected areas, however.
Yun added, “unfortunately, housing shortages will last longer and home prices will no doubt continue to outpace wage growth for the foreseeable future.”