Mortgage Rates & Increasing Finance Accessibility
In February, mortgage rates remain near record lows. According to Freddie Mac’s Mortgage Survey, the average mortgage rate for a 30-yr FRM was just 3.65%. Despite tough market conditions, these rates present an excellent opportunity if you’re thinking of buying.
In a piece of good news for buyers, it should be easier to get financing in 2016. Fannie Mae’s fourth quarter 2015 Mortgage Lender Sentiment Survey™ shows that lenders expect to ease mortgage credit standards for GSE-eligible loans and government loans over the next three months, opening the door for more buyers to get financing.
If you’re thinking of buying a home, it’s important to act sooner rather than later. As the year goes on, affordability will continue to suffer. With home prices expected to increased around 4 to 5 percent this year and mortgage rates expected to rise to around 4.5 percent, the longer you wait to buy, the less home you’ll be able to afford. Even small increases in mortgage rates and home prices can have a large impact on your future monthly mortgage payment!
Last year, limited inventory dominated the headlines for the real estate industry, and that trend looks to continue this year. According to the National Association of Realtors (NAR), inventory dropped 12.3 percent from November to December, falling to 3.8 percent lower than December 2014. That equated to just a 3.9-month supply of homes.
Generally speaking, a 6-month supply of homes (meaning it would take six months at the current sales pace to sell all the homes on the market) represents a balanced market, one in which there are enough homes to meet demand. For much of 2015, inventory remained well below a 6-month supply, and will likely remain so for 2016.
Why is inventory so constrained? Part of the sharp drop in December is due to the seasonal slow down in many states. Cold weather and holidays keep many buyers out of the market and many sellers waiting for demand to pick back up. Additionally, new home construction came to a standstill when the housing market crashed, so there are fewer new homes available. Existing home inventory is low as well. A combination of factors, such as locked-in low interest rates and a sense that home prices will continue to increase, are keeping current homeowners from listing their homes.
If you’re thinking of selling, this market is very much a seller’s market. When inventory is scarce, buyers are forced to compete over the few homes for sale. Homes are selling faster, and in many markets bidding wars drive home prices up well above asking. At the very least, you’ll be in a strong negotiating position.
There are lots of things that we, the members of my team, do to sell a house. I could list them all, but my blog post would quickly turn into a book! So, instead, I thought I would give you a few pointers on how NOT to sell your house.
A sure fire way to NOT sell your house is to not be ready for your buyer. We live in a house very differently than how we sell a house. Your house doesn’t need to be magazine worthy but it should be clean and well organized. Minimize the “stuff”!
Another thing that is sure to turn off buyers is the photos. The photos that are used to market your house should be considered, in most cases, the first showing. Using dark shots of rooms or small corners or pieces of furniture (not actually the house) will certainly prevent you from getting top dollar for your house and most of the time will prevent a sale altogether. You should be sure that the photos are taken with an extra wide angle lense and don’t be afraid to ask your agent to take better pictures if you don’t like the first round. We aren’t even afraid to use a touch of photoshop to make sure that the house is presented in the best light possible.
One more thing you can do to NOT sell your home is to overprice it without planning for adjustments. As an overpriced house sits on the market, it starts to develop a stigma and it becomes stale. From a buyer’s perspective, the value of the house actually drops over time as it sits on the market. There are lots of indicators that tell us a house is overpriced. Even us professionals sometimes miss the mark on pricing! The trick is to react quickly! If you don’t respond quickly with a price reduction, the buyers might see the homes value now to be lower than they would have if the price was dropped a month sooner. You have to beat the buyer to the home’s actual value in order to save your sale!
I wanted to write today about the community that I live in. I live in the Village of East Rochester, population 6,594. What a village. What a community. What a wonderful place to live.
But what is even more impressive are the people who live here, work here and go to school here. We very recently suffered a very tragic loss. A police officer was shot and killed in the line of duty. Daryl Pierson left behind a wife, 2 kids, a mom and dad, siblings and many other people who loved him. Unfortunately, many people probably didn’t even know that a true hero lived among us until he was taken from us. I can’t imagine the unmeasurable pain that is ripping through his family at this time.
What I do know is that our little community has shown incredible amounts of support and grace through this darkness. Community members stood tall, hand over their hearts and tears in their eyes, along 31F as the funeral procession went by. A high schooler made ribbons for others to wear in support. Other community members decorated the entire village with blue and black bows honoring Officer Pierson. Children wore blue and black to school on the day of his funeral.
The most impressive sight was at Edmund Lyon Park and throughout the village that warm Wednesday night. I walked down with a friend and our kids to the village park the night of Officer Pierson’s funeral and was overcome with emotions. The sight was one that could not be adequately described nor captured by photos. Luminaries were outlining the park, and set through the streets of East Rochester. Thousands of Luminaries. Literally, thousands! I had never felt more sorrow and more pride in the same moment as I did that night. The sorrow was of course for the loss of someone that was so loved, and for his family who will never get over such loss but will have to learn to live with a void. The Pride was for the people of this tiny, humble community who came together to offer support with such beauty and grace to strangers. There is truly no other place I would choose to live or raise my children. I am honored to call this village my home and I pray that the Pierson family will find some peace in knowing what an incredible impact Daryl has left on our hearts.
Did you know that 90% of people begin their home search online? What does that mean to you as a seller??
To us, it means that by the time someone steps foot inside your listed home, it is actually their second showing!
What the heck am I talking about? A buyer’s very first showing of your house probably happens in their living room or at their office. When they are searching online, the photos of your home are what will make or break a “second showing”. Make sure those online photos show your home in the best light possible.
There are so many things that you can do as a homeowner to make sure you do your part in that: Clean, paint, make small cosmetic upgrades if needed.
You can also make sure your agent is doing their part! We always use a wide angle camera lens to capture the rooms best look. We take lots and lots of pictures so we have a lot to choose from. We can use a total of 25 photos for a listing and we always use the best ones!
Video can also be a great tool in selling your home. A potential buyer can get a really great feel for the flow of a house by watching the video!
A picture is worth 1000 words. This safe has been through a lot. Tell its story. Image credit: “safe” – © 2007 Paul Keller – made available under Attribution 2.0 Generic