5 Real Estate Trends to Look For in 2012
Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:
5 Top Real Estate Stories in 2011
In 2011, we experienced one of the most volatile housing markets in American real estate history. Things we never anticipated happened. Events we were sure would take place didn’t. Today, we want to review the five headlines we think had the biggest impact in 2011.
Sellers: 4 Reasons To List Before The Holidays
I have heard a lot lately ”Should I wait until January to list my house” -or- “Why should I list now?”
Here are my top 4 reasons why I think you should list now instead of waiting until January or February.
1) the home shows best during this time of year – it is decorated the best now.
2) there is less inventory on the market this time of year, after the first of the year more properties will come on the market, therefore, more competition.
3) relocation buyers are coming to visit during the holidays, during the mid-term break.
4) it takes a couple of weeks to get the marketing up and running, by placing the property on the market now, you will be out in front in January, assuming it doesn’t sell during the holidays.
Lastly, I will leave with a story about a Seller who called me in early December last year. He called to tell me he wants to take the house off the market for the holidays and put back on after the first of the year. I told him he could do what ever is best for his family, but I strongly encourage him not (for the reasons above). He said, “I trust you Neil, and if you say so, we’ll leave the house on the market”. Well on December 27th he accepted an offer that was $2000 less then full price and $3000 more than the price he was going to reduce to on January 2nd. Needless to say, he was happy he left his house on the market over the holidays.
I hope this helps you when deciding if you should list now or after the first of the year. And if you are listed now and thinking about taking the house off the market for the holidays…don’t!
House Prices: Where They Will Be in the Spring
Many sellers want to wait until the spring before putting their home on the market. This might be for any of several reasons:
- They don’t want to be inconvenienced during the holiday season.
- They believe that they will see more potential buyers and as a result will get a higher price.
- In the northern part of the country, they might not want people walking through the snow and then into their house.
- All of the above
In a normal real estate market, this may make sense. However, this market has been anything but normal. This spring will also see some abnormalities. The biggest difference will be the direction prices will take.
In years past, the spring market would favor the seller because increased demand would outpace any increase in supply: the number of houses coming onto the market would not be as great as the number of buyers newly entering the market. In most situations, when demand is greater than supply, prices increase.
The reason this spring will be different is that the supply of homes coming to the market will be dramatically impacted by foreclosure properties being released by the banks. Many believe this increase in inventory will far outweigh buyer demand. In situations where supply is greater than demand, prices decrease.
Short Sale vs. Foreclosure: What's The Best Option?
Today’s ever changing real estate industry has brought upon some very challenging questions from our clients. We as counselors, want to put forth the best, non-emotional advice that we can, in hopes that we can help our clients and their families navigate the rough waters of the short sale process.
The most prevalent question and one that continues to permeate the industry is:
“Why should a seller go through the short sale process rather than letting their house be foreclosed upon?”
Short Sales Picking Up Steam
The Office of the Comptroller of the Currency released their Second Quarter 2011 Mortgage Metrics Report last week. In the report, they covered the success the banking industry is having in each of several categories regarding the current housing crisis. Here is what they found:
13,780 Homes Sold Yesterday!
To all those who have declared the real estate market dead, we want you to know that over 13,780 houses sold yesterday, 13,780 will sell today and 13,780 will sell tomorrow.
Selling? Waiting Until the Spring Makes No Sense
Late last year, banks were warned that they needed to guarantee that the paperwork necessary to start a foreclosure process on a family was both accurate and complete. Since then, the banks have slowed down the foreclosure process while they re-examined their procedures. They are now confident that all the required documentation is in order. We are currently waiting on a settlement between the banks and the state attorneys general which will establish what penalties will be assessed.
Once this settlement is reached, the banks will again move forward on many homes which are currently stalled at some stage in the foreclosure process.
How many homes are we talking about?
There are millions of homes in this category. Calculated Risk quantified the situation:
“There are a large number of seriously delinquent mortgage loans in limbo waiting for this settlement. According to LPS, at the end of August there were about 1.87 million loans seriously delinquent and another 2.15 million loans in the foreclosure process. This is only down slightly from a year ago when 4.4 million loans were seriously delinquent or in-foreclosure. Once the settlement is reached, the pace of foreclosures will pick up sharply.
The pace will “pick up sharply”.
Bottom Line
As more foreclosures come to the market at discounted prices, there will be greater downward pressure on all housing values. Waiting for the spring selling season to put your house on the market may not make sense this year. The increase in demand may be overshadowed by an increased supply of distressed properties.
A Window of Opportunity for House Sellers
There has been much confusion as to where housing prices are headed. Today, I want to give my opinion on this subject for the short term based on what I learned at a recent real estate seminar I attended. I believe sellers have a window of opportunity for the next 90-120 days in which to sell their homes for maximum price. I believe there will be increased downward pressure on home prices later this year and the first half of 2012.
House sold in 2 days!
A house in DeForest that we listed on Monday, received an accepted offer by Wednesday! With five showings the day after it listed we generated an offer, and a few hours after receiving the offer, our seller accepted. A few lessons here; 1) price it right and it sells fast. 2) plenty of buyers are in the market for a home. 3) when offer comes in, take it seriously, move swiftly, and diligently work to bring it together.
Congratulations to the buyer and seller of this transaction. The buyers are excited they found the house they were looking for. The sellers, of course, are elated their house took 2 days to sell.
Selling Your House? 5 Reasons To Do It NOW!
The conventional wisdom when selling a home has always been to wait until the ‘Spring Buying Season’. Over the years, that has seemed to make sense and is now accepted as a good strategy for those who want to sell their house and receive the best possible price. This real estate market has shattered many previously held beliefs. The wisdom of waiting for a spring market is another belief that is about to fall. Here are five reasons why?
Myths: The Earth Is Flat and Newspapers Sell Houses
It is amazing how masses of people can believe something that is absolutely untrue. The greatest example of this is that at one time the vast majority of people believed the world to be flat. Today, we want to debunk another commonly held belief – that newspapers sell houses. Somehow this notion gained believability even though the facts consistently prove it to not be true.
We should know what methods perspective purchasers use to find the home of their dreams when we are selling our house. That would enable us to develop the best marketing strategy to attract a buyer. The National Association of Realtors (NAR) has just released the 2010 Profile of Home Buyers and Sellers*. This report is recognized by most as the best compilation of data on today’s buyers and sellers because of the enormous amount of data available at NAR’s fingertips.
Let’s look at the actual search habits of today’s buyers as reported by NAR:
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