Real Estate Market

Note: May 2019 data below are the most recent released by the National Association of Realtors.

Existing-home sales rebounded in May, recording an increase in sales for the first time in two months, according to the National Association of Realtors®. Each of the four major U.S. regions saw a growth in sales, with the Northeast experiencing the biggest surge last month.

Total existing-home sales (transactions including single-family homes, townhomes, condominiums and co-ops) jumped 2.5% from April to a seasonally adjusted annual rate of 5.34 million in May. Total sales, however, are down 1.1% from a year ago (5.40 million in May 2018).     

NAR's chief economist, Lawrence Yun, said the 2.5% jump shows that consumers are eager to take advantage of the favorable conditions. “The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding.”

The median existing-home price for all housing types in April was $277,700, up 4.8% from May 2018 ($265,100). May’s price increase marks the 87th straight month of year-over-year gains.

Total housing inventory at the end of May increased to 1.92 million, up from 1.83 million existing homes available for sale in April and a 2.7% increase from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, up from both the 4.2 month supply in April and from 4.2 months in May 2018.

Properties remained on the market for an average of 26 days in May, up from 24 days in April and equal to the 26 days in May of 2018. Fifty-three percent of homes sold in May were on the market for less than a month.

Per Freddie Mac data, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.07% in May, down from 4.14% in April. The average commitment rate across all of 2018 was 4.54%.

First-time buyers were responsible for 32% of sales in May, unchanged from the 32% the month prior and up from the 31% recorded in May 2018.

If you are planning to put your home on the market -- especially if you live in a place where prices are rising and buyers are competing for homes -- it can be tempting to list your property at a high price hoping that you'll actually get it. After all, it can work with cars, why not with homes?

You may want to think twice -- the resale of homes and automobiles are very different things.

Experienced Realtors who have been through dozens, scores, or even hundreds of transactions, will advise you to price your home appropriately from the outset because it's pivotal to seeing the home sold quickly and at the best price. Research backs up what experienced Realtors already know: overpricing your home and then lowering the price a few times most often leads to a final sales price significantly below what you originally should have asked for it.

And, to make matters worse, the longer a home remains on the market, the deeper the discount is likely to be off the original price. Ouch!

How to price your home correctly

Many homeowners seek to price their home based on factors like the price they paid for it, the balance that they currently owe, or simply on the profit they need to buy another house or to meet their financial goals. These motivations are perfectly understandable but in reality the value of your home is what the market will bear. Here's the problem: If a property is overpriced, some potential buyers will avoid looking at it at all (and having no one show up to see it is a pretty clear message from the market). Others may view the home but walk away without making an offer.

So, what can you do? Choose a Realtor who can provide you with the best comparative market analysis (CMA) and who understands your local area intimately. Some agents may attempt to woo you with an inflated price -- it probably happens every day somewhere -- but in the end the market will speak clearly, and choosing an experienced Realtor who understands the importance of market-driven pricing will end up being a choice you won't regret.

Your Realtor's CMA should include sales prices for similar properties nearby that have sold recently, prices for currently listed homes (these will be your competition), and prices of homes that were taken off the market because they didn’t sell. Look for a Realtor with demonstrated experience who can factor in a range of local market issues to produce that all-important first price.

If the price is right from the beginning, it usually means not only a faster sale, it typically means more money in your pocket.

When preparing your home for sale, a number of simple cosmetic changes often provide the biggest return on investment. Here are three tips to upgrade your house without breaking the bank:

• Bring in the light. The right light creates the right mood. Adding lights to dark rooms can make your home feel warm and inviting. Bring outdoor light inside by opening curtains and installing economical suntubes.
• Create Space. Many of today's buyers are looking for open rooms. Consider removing unwanted walls to make your home feel more spacious. Buyers will often pay a premium to get a bit of extra room.
• Replace Flooring. Get rid of that old carpet in the den and replace it with today's newer hardwoods and laminates. You don't have to spend a lot to make a big impression!

These simple tips can help you sell your home and take advantage of today's market. Please contact us if you have any questions about selling your home. We are here to help!