BHHS Autoflow Newsletter Booklet

REAL ESTATE Insider VO LU M E 1 N o. 1

The State of the Housing Market S E M I - A N N U A L N AT I O N A L U P D AT E :

Welcome! I hope you find value in this information. The decision to sell or purchase real estate deserves great attention to personal objectives. The overall market conditions noted here convey a macro view on the real estate environment. Different price points and certain niches behave differently. It is extremely important to drill down to a hyperlocal level when evaluating a sale or purchase of real estate. I would be happy to help you by providing an analysis on price trends in specific neighborhoods and on any property you consider selling or buying. This way, you can make informed decisions based on your personal circumstances.

A C T U A L Y E A R - O V E R -Y E A R % C H A N G E I N P R I C E 12.0% WA

VT (2.1%) 4.4% MT

9.1% OR

6.8% ID

2.8% ND 6.0% MN

5.9% CA

6.0% AZ

8.8% CO

5.0% IL

0.3% WV 2.3% VA

3.4% KY

5.7% NC

5.1% TN

6.0% AR

CT (0.4%) NJ (2.9%) DE (-0.2%) MD (3.3%) DC (5.0%)

5.8% SC 0.4% MS

4.8% TX

RI (4.9%) 3.2% PA

3.4% OH

5.8% IN

4.9% MO

1.2% OK

2.0% NM

8.7% MI

2.3% IA

3.1% KS

MA (6.1%)

7.2% NY

7.0% WI

5.3% NE

6.7% NV 10.1% UT

NH (6.7%)

2.5% SD

-3.9% WY

0.2% ME

6.6% AL

5.6% GA

< 0.0%

4.7% LA

0.0% - 1.9% 6.4% FL

-0.2% AK

2.0% - 3.9% 4.0% - 5.9% > 6%

UNITED STATES 6.9%

6.1% HI

FEELING HOT! HOT! HOT! Prices are still up, at 6.9% over last year which is almost double the

existing homes coming to market is needed combined with a recovery

normal historical rate of 3.6%. Inventory levels are still lowâ&#x20AC;&#x201D;even

in new home construction. These will help the market achieve balance.

scarce in some price ranges. Affordability is not a major issue because

Core Logic, a leading provider of real estate data and analytics,

mortgage rates remain low and the economy is in good shape. The

estimates a 5.1% increase in prices over the next 12 months.

real challenge for many is locating property to buy! An influx of

“A much higher share of homeowners compared to a year ago think now is a good time to sell, but until they do, sales will likely IS SUPPLY ON THE WAY? Good news for future inventory! More Americans believe it is a better time to sell and new construction will catch up. As these homes come to market, we will see some moderation in home price gains. This is an important step in sustainability of a healthy market.

The absorption rate of national home sales is reflected in the chart above. Absorption rate is the amount of time it would take the current demand level to absorb the available supply. Six months equals a normal market. A number less than six months indicates a seller’s market and greater than six months indicates a buyer’s market. This number will fluctuate widely based on the market price segment that is being analyzed. Nationally, we are currently near a four month supply. This, again, is indicative of continued strength in demand and a reduction in available inventory.

stay flat and low inventory will keep price growth moving swiftly.”

- Lawrence Yun NAR Chief Economist

Look at the chart below on the 30 year fixed rate mortgage going back to 1971, we are still at historical lows. The cost of ownership is still very affordable.

T H E COST O F

RENTING HISTORICALLY:

VS.

BUYING NOW:

Percentage of Income Needed to Afford Median Rent

25.8% 29.2% Percentage of Income Needed to Afford Median Home

21.0% 15.8% TO RENT OR TO BUY? Even though prices are rising, owning a home is more affordable than renting for many Americans because rents have risen consistently over the past 30 years. At the same time, mortgage rates remain at historical lows. Locating potential homes in some markets requires patience and a strong and clear strategy. First, we look at the feasibility of owning versus renting. Next, we review our buyer process and set the strategy according to you and your objectives.

FOR EVERY 1% INCREASE IN MORTGAGE RATES, THERE IS A 10% DECREASE IN PURCHASING POWER TO KEEP THE MONTHLY PAYMENT CONSISTENT AT A 30 YEAR FIXED RATE MORTGAGE. And then check out the median rents going back to 1988. It is getting more expensive to rent and more affordable to buy in many cases. Of course, there are some good reasons to rent â&#x20AC;&#x201C; this is simply a look at the financial aspect.

THE MESSAGE FOR SELLERS It is a great time to sell property in most markets and many price segments across the country. Potential sellers have limited competition and therefore are often able to sell for a premium even to current market conditions. Multiple offers in the more affordable price ranges are not unusual on reasonably priced properties. The law of scarcity is in effect, and many are taking advantage of this.

If you are considering a move, I will be happy to provide an analysis of your property’s value so you can make an informed decision.

Also, it is very important to maximize your exposure to put your property in front of as many potential buyers as possible.

THE MESSAGE FOR BUYERS If you are looking for your primary residence, let’s get together so I can review my buyer process with you so you are in the best position to succeed. It can be competitive out there! We have the best resources and the best connections to accomplish your objectives. If you are renting and considering signing another lease, let’s talk about that first. If you keep visiting our area and know you will retire here, it may be time to buy your future home and rent it out for a few years in advance while the cost of ownership is still extremely low. For investors, pay very close attention to your model and cap rates that make sense. Some markets are saturated and you will want some guidance from a professional to help with current valuations and rental or improvement projections.

Thank You Thank You Thank you for reviewing this report. We believe it is our mission to keep you informed on the real estate market nationally, regionally, and hyper-locally in order for you to make the best and most informed decisions. If you would like an analysis on a specific property, please contact me. I will help you evaluate both relevant sales and more forward-looking indicators of absorption rates and competitive supply. With the best resources and the strongest team at Berkshire Hathaway HomeServices Florida Network Realty, I am confident in my ability to provide top-tier service for you, as your trusted real estate advisor.