Things to Consider
Is it smart to buy a home with school back in session?
With temperatures on the decline and daylight growing shorter by the minute, vacations of fun in the sun are in the rearview mirror. Parents are back into working mode and kids are getting settled into their homework, tests and other school-related activities.
Summer is an ideal time for homeowners to enter the housing market because it affords them the flexibility needed to adjust to a new location - something that's particularly helpful for parents whose kids are in elementary, junior or high school. But just because your son or daughter is hitting the books again doesn't mean you have to stop your search for your dream home.
Here are a few of the reasons why it pays to be in the market even when schools are back in session.
Just about every study concludes that when the spring and summer turn to fall and winter, it isn't just the temperatures that wind down - so does buyer volume. According to the most recent figures from the National Association of Realtors, existing-home sales in September fell 3.4 percent from August.
Mor Zucker, a Denver, Colorado-based real estate agent, told Realtor.com that when home-seeking traffic slows, asking prices frequently follow, appealing to people looking to buy on a budget.
"No matter how hot a market is, you'll still see price reductions and more inventory staying on
the market longer from September through December," Zucker explained.
Additionally, houses tend to stay on the market for longer periods of time, giving would-be buyers more time to consider their options without having to rush into a decision before a competitor makes theirs.
Indeed, the average listing in September 2018 (32) nationwide remained available for three full days longer than it did in August (29), the NAR sales report noted. These most recent findings are reflective of home sales figures in previous years when summer transitions to fall.
More options to choose from
One of the reasons why home prices are higher is due to supply and demand: People are buying at a clip that's faster than builders are developing and people are selling. But the market changes from September through the end of the year to one that's more favorable to buyers.
As of October 2018, unsold inventory is the equivalent of approximately 4.4 months, according to NAR's analysis. This means that it would take approximately four and a half months for supply to be exhausted were no other properties put up for sale. That's up from 4.2 months in September 2017 and 4.3 months in August 2018.
A house's dimensions, price and history are a few of the aspects buyers take into consideration before deciding what place to purchase. They also want to get an idea of what the neighborhood sounds or looks like, something that may be difficult to determine with preciseness in the summertime when families are out of pocket and on vacation.
Provides more accurate depiction of what's 'normal' for foot traffic
Routines change in the summertime. The people there in June, July and August may be gone when the temperatures fall and the leaves change color. Buying when classes resume can give you a more accurate sense of what a neighborhood is like in terms of composition and day-to-day activities.
Bottom line: Just because school has resumed doesn't mean your home buying excursions should end. Shopping over the next few months may help you find the house you've been waiting for at a price that you can afford.
Things to Consider
It's a sellers’ market — but it may shift to buyers soon
It's safe to say that housing conditions have favored sellers for quite a while. After all, the last time home values fell or held constant on an annual basis was back in 2012, according to the National Association of Realtors, and available properties currently hover around 1.9 million
But signs are emerging that suggest a market shift is beginning to take shape - an encouraging development for would-be buyers bound by a budget.
In September 2018, supply levels of homes for sale slipped just 0.2 percent, according to Realtor.com. That's substantially a reduced rate of decline in inventory compared to previous reports. But perhaps the more telling statistic is with regards to new listings, which rose an impressive 8 percent when contrasted with the same period in 2017. That's the largest uptick in five years.
Danielle Hale, Realtor.com chief economist, indicated that these most recent figures may serve as an inflection point that presages the dawn of a stretch that favors people looking to purchase.
After years of record-breaking inventory declines, September's almost flat inventory signals a big change in the real estate market," Hale predicted. "Would-be buyers who had been waiting for a bigger selection of homes for sale may finally see more listings materialize."
Home sales have slid since spring
A dive into the data suggested that this shift was in the making for quite some time. In August, existing-home sales flatlined from 12 months earlier, according to NAR's analysis. This made it five months in a row wherein residential real estate transactions dropped or stayed the same on a year-over-year basis. In year-to-date estimates, existing-home sales are about 1.5 percent lower versus the first eight months of 2017.
Lawrence Yun, chief economist for NAR, mentioned that purchase parity hasn't been nearly as apparent as of late.
"With inventory stabilizing and modestly rising, buyers appear ready to step back into the market," Yun explained.
Additionally, housing starts have picked up the pace. Indeed, in August, groundbreakings jumped more than 9 percent to a seasonally adjusted annual rate of 1.2 million units, an analysis conducted by the U.S. Census Bureau shows.
National Association of Home Builders Chairman Randy Noel said developers have been able to make up for lost time due to affordability concerns among families.
Even in the pricing aspect, sellers' market conditions appear to be on their last legs. Median list prices did rise in September, up 7 percent, according to Realtor.com, but that was down from the 10 percent increase 12 months ago. And among newly advertised properties, prices were
around $25,000 more affordable than houses already up for sale.
All this being said, Hale cautioned not to expect any major swings in favor of home shoppers.
"Plenty of buyers in the market are scooping up homes as soon as they're listed," Hale advised. "[This] will keep national increases relatively small for the time being."
However, if you've been anxiously awaiting the day when you can buy at a price that's in keeping with your financial allowances, that day may be in the not-too-distant future.
Practicing good digital self-protection
The digital age is filled with wonders and convenience. Remember the days before you could make a bank deposit through your phone in under a minute? When your only options were to send it through the mail or go to a bank, fill out a little slip of paper and wait your turn to be helped? Do you already wonder how you functioned in such dark ages? That was, what, maybe a decade back? Less? Times are changing rapidly and it’s easy to feel overwhelmed.
And for all of you saying, “I still take my deposits to the bank, thank you,” don’t tune out yet. Unless you are reading this on a piece of paper handed to you by a friend because you don’t access the internet, carry a mobile phone, have a social media profile, use a computer or otherwise engage in the interconnected technology of today’s world, this also applies to you.
Advancements in technology are enabling us to move through our lives with greater efficiency and convenience. The connected nature of that convenience also opens us up to risk. Hacking, phishing, viruses… these are enough to scare some people away from participating at all. Others don’t give it another thought. There is a happy medium, and that’s to understand what you’re looking at and what to do about it.
Here are a couple of helpful tips for practicing good digital self-protection:
Passwords and Identifying Questions
Have you ever used the same password on multiple websites because it’s too hard to keep track of all your passwords? Or parents, how about that combo of your kids’ names and birthdates? And how many identifying questions could be answered by someone viewing your social media profiles, such as schools you attended, places you’ve lived, maiden name, middle names, first car, favorite movie perhaps?
No, you don’t need to slam the gates closed on your social media profiles or take memorization classes to improve retention of the several hundred passwords in your digital life. Instead, you could try using a password vault (there are plenty of password solutions out there – run a search and compare your options to find the one that’s best for you). Don’t forget, it’s also a good idea to change your passwords a few times a year.
When posting on social media, keep in your mind the kinds of questions that you have answered in order to verify your identity with your banks, credit card companies, etc. Make sure you aren’t offering those answers up in your profile, photos, comments or posts. Have you ever seen those games people play where they add together the first street they lived on, their first pet’s name and their favorite color to come up with a funny name or poem? Seen with a more aware eye, how does that game look to you now?
Secure Sites and Saving Payment Info
You’re about to fill out a form that will convey your personal details to a company and a little voice in the back of your head asks, “is this safe?” Or you’ve just completed a transaction using your bank account or credit card and you notice a checkbox asking if you want to save this information for easier use the next time. In this world of warnings and alarm bells around identity theft, it’s good that these are triggering questions for you. Now, go reset that panic button. You have ways to make good decisions here.
You know that “http” stuff in front of the website you went to? Well, if there is an ‘s’ then there is a layer of security in play. It’s always a good idea to check with your better judgment whether you think the website you’re on is one you trust, but checking for that https:// before the website name can quickly answer the question of, “did they make an effort at making this form I’m about to fill out, or this shopping cart I’m about to use, secure?” If you don’t see an ‘s’ and you’re about to type in your social security number or credit card number, it might be good to pause and consider the safety of it.
As for that little checkbox asking whether to save your financial information for next time, do you have a good sense of the company and their commitment to protecting their customers’ information? Is their site using security? How do you feel about that information being in someone’s database? This is a convenience that can save time and the very real pain of scrambling through wallets and squinting at numbers while attempting to tap out the sequence correctly before timing out. And plenty of companies get it right. Seeing that checkbox is a good moment to remember to slow down and check your comfort level.
Life in this digital age doesn’t have to be spent in a constant state of fear, but awareness of the risks is important. When in doubt, stop and do a little research. Look at the details of the sites and mobile apps you use. Research if needed. Call the company. Ask questions. Understanding is the key to good digital self-protection. You’ve got this.
Be safe out there.
Things to Consider
Is there a risk of another housing bubble burst?
Is the housing market bubble burst on the way? With median home prices rising for 78 months in a row, according to the latest National Association of Realtors data, some industry experts wonder if another one may be on the horizon.
These real estate insiders' concerns, of course, trace back to the housing crisis of 2008, when the cost of buying a home edged higher on regularly occurring intervals, similar to what's happening now, up each month on a year-over-year basis.
As bubbles in all their forms tend to do, it eventually burst, as the Case-Shiller Home Price Index recorded its largest drop in 2012. This sent the market - as well as the U.S. economy - into a major tailspin that ultimately resulted in the Great Recession, which was experienced on numerous fronts.
"It's interesting to watch the dynamics of the market," housing and home loan expert Rich Sharga explained to National Mortgage News. "What we see is prices rise, sales activity slows down, prices weaken and then sales pick back up. It's the way a housing market is supposed to behave in a normal environment."
Home prices up substantially, but not to same extent
The problem, Sharga noted, is that it's been a long while since the existing-home prices reversed course. According to analysis conducted by the Urban Institute's Edward Golding, home prices have risen by approximately 34 percent since 2012, NPR reported, far outpacing the rate of inflation. But that's quite tame in comparison to previous bubble periods, such as between 1997 and 2006, when home values moved at a pace that was 84 percent faster than inflationary pressures.
Golding and his team noted that home prices heated up so much, it got to the point where buyers could no longer afford them. Given that people are still buying houses today at a healthy clip, buyers are clearly able to afford the price increases, another key distinction of what's happening now versus then.
Foreclosures still few and far between
The low rate of foreclosures suggests as much. For instance, in August, some 30,187 properties in the U.S. overall began the distressed-property filing process, according to the most recent figures available from the ATTOM Data Solutions. While that's a slight increase from the same 30-day period last year - less than 1 percent - it's the first time in 36 straight monthly reports that the annual foreclosure rate climbed.
Translation? The unabated uptick in home prices is rooted in high-quality economic fundamentals, including a low unemployment rate, vibrant gross domestic product growth and steadily improving wages.
"That gives me confidence that things are moving well," mortgage servicing expert Gagan Sharma told National Mortgage News.
This doesn't necessarily mean that the housing market or the economy won't encounter troubled waters, real estate observers warn. However, because the people are on firmer ground financially, homeowners are in a better position to ride out the storm should one develop.
Things to Consider
How long will it take to find your house?
Given it's highly labor-intensive and weather-related issues can throw a real wrench into production timetables, building a house takes time. According to the National Association of Home Builders and Census Bureau, it's typically seven solid months before a home is ready to be to moved into and lived in.
But how long does it take to find a house? As you might expect, the answer isn't always clear-cut. Nevertheless, the NAHB recently released a report that gives would-be homebuyers an estimate of the weeks they can anticipate devoting to the search.
On average, prospective homeowners spend at least three months before they find the property they eventually purchase, the NAHB revealed its latest Housing Trends Report. The poll, which questioned approximately more than 15,000 individuals, found 51 percent had been looking for no fewer than three months. In the fourth quarter of 2017, roughly six in 10 homebuyers were actively searching for a full three months.
What's the hold up all about?
It raises the question: Why is it taking this long? Part of the issue is the supply - there isn't enough of it. Indeed, based on the most recent figures available from the National Association of Realtors, existing homes available for sale in July totaled 1.9 million. This figure represents a supply level of 4.3 months at the present pace of homes going under contract.
Lawrence Yun, chief economist for NAR, stated the reality of the situation.
"Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand," Yun explained.
Total housing starts in July reached a seasonally adjusted annual rate of 1.1 million, the Commerce Department and U.S. Department of Housing and Urban Development reported in August, a slight increase at just shy of 1 percent.
Robert Dietz, NAHB chief economist, chalked up the modest uptick to a combination of factors.
"Supply-side challenges, including increases in material prices and chronic labor shortages, are affecting affordability in many markets," Dietz said. "However, consumer demand remains strong due to a growing economy and job market and favorable demographics."
On the plus side, Dietz hastened to mention, construction for single-family houses is improving notably on a year-to-date basis, rising 7.2 percent and 3.4 percent among multifamily properties. And in the Midwest, combined housing starts jumped 11.6 percent on a year-over-year basis.
Buyers know what they want
It would be one thing if aspiring homeowners were fine with purchasing virtually anything with four walls. But of course, everyone enters the market with a general idea of the picture perfect house.
It also explains why 45 percent buyers, in the latest NAHB Housing Trends Report, cited properties not having the features they most wanted as the reason why they'd been looking for three months or longer, the leading rationale. Meanwhile, 43 percent said their lengthy search had to do with price point, unable to find a house in their budget range.
Whatever the ultimate cause, homebuyers are undaunted by the challenge that's before them. At 55 percent, a majority of respondents in the NAHB study indicated they planned to keep on looking until they found something they wanted. Just 16 percent said they were taking a break for the time being, starting again in several months or next year.
Whether you've just entered the market or have been at it for a while now, don't give up. Something will turn up. Just be ready to take action when the time comes. Like a fine wine, a delicious home-cooked meal or building a house from scratch, locating your home takes time.