Getting a house market ready is a step by step process. It takes active participation from agent and owner(s). One of the most valuable insights an agent should bring to a seller is what to expect . Have you debated about selling? Take it one step at a time.
Four years ago Jacob and Amanda relocated to the DMV area for a work opportunity with every intention of going back to their home state of Michigan. Despite not knowing their timeline as to when they could go home, they knew it was better to buy versus rent. To be a a small part in their larger plan, a facilitator to the purchase of their home and now selling it, has been rewarding. Their hard work and careful planning is paying off. They are on their way home. With only three day on the market, they received an offer over list price and stand to walk away with a return on their investment.
Under Contract: 20432 Summersong Lane Germantown, MD 20874
Link to listing | Virtual Tour Link
Bedrooms: 2 | Full Bath: 3.5 | Sq. Feet: 1594
A Historic Rebound for the Housing Market
Pending Home Sales increased by 44.3% in May, registering the highest month-over-month gain in the index since the National Association of Realtors (NAR) started tracking this metric in January 2001. So, what exactly are pending home sales, and why is this rebound so important?
According to NAR, the Pending Home Sales Index (PHS) is:
“A leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.”
In real estate, pending home sales is a key indicator in determining the strength of the housing market. As mentioned before, it measures how many existing homes went into contract in a specific month. When a buyer goes through the steps to purchase a home, the final one is the closing. On average, that happens about two months after the contract is signed, depending on how fast or slow the process takes in each state.
Why is this rebound important?
With the COVID-19 pandemic and a shutdown of the economy, we saw a steep two-month decline in the number of houses that went into contract. In May, however, that number increased dramatically (See graph below):This jump means buyers are back in the market and purchasing homes right now. Lawrence Yun, Chief Economist at NAR mentioned:
“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
But in order to continue with this trend, we need more houses for sale on the market. Yun continues to say:
“More listings are continuously appearing as the economy reopens, helping with inventory choices…Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
As we move through the year, we’ll see an increase in the number of houses being built. This will help combat a small portion of the inventory deficit. The lack of overall inventory, however, is still a challenge, and it is creating an opportunity for homeowners who are ready to sell. As the graph below shows, during the last 12 months, the supply of homes for sale has been decreasing year-over-year and is not keeping up with the demand from homebuyers.
If you decided not to sell this spring due to the health crisis, maybe it’s time to jump back into the market while buyers are actively looking for homes. Let’s connect today to determine your best move forward.
Have you noticed that as soon as a property goes on the market, it seems that within days they’re under contract? All indicators point to a strong summer real estate market.
- New pending sales up 25.5% ( Zillow June Report)
- New listings taken up 19.3% month -over -month ( Zillow June Report)
- Demand for housing is out pacing supply = competitive market for buyers, excellent time to be a seller ( DC Metro area months supply is 1.4)
- Our area is above average when it comes to exposure to low risk jobs by market. Meaning, there are more DC metro area residents who remain working in sectors including federal, state and local government, information technology, military and utilities.
#LMRE Most Current Under Contract or Sold Properties
The current real estate environment poses a great opportunity for sellers and buyers. Timing couldn’t be better for both.
- Demand for housing is high
- Supply/Inventory is low, below what experts consider balanced
- Interest rates are historically low
In this market sellers earn top value for their home and buyers experience greater buying power and increased affordability.
- The Mid Atlantic Region to include DC, VA, MD, parts of WV, PA and DE housing Months of Supply is 2, well below the 4 to 6 months which is generally considered a balanced market.
- The impact your interest rate has on your monthly mortgage payment is significant. An increase of just $20 dollars in your monthly payment can add up to $240 per year or $7,200 over the life of your loan. Maybe it’s time to lock in now while rates are still low.
- How can you take advantage of this market? Don’t wait and see, connect with a RE professional and make a plan.
There’s only so much sellers can control, the key is adjusting to the things they can’t. An agent’s true value is helping a seller navigate one to minimize the other. So what happened with Vaughn Landing? It closed 7 months and 3 contracts later. A three year old townhouse with one past owner in Germantown, MD, conveniently located, minutes from MARC station, highways and shopping.
The seller had gone through all the listing steps to prepare the townhouse for market. They priced it well, given its meticulous condition, market trends at the time and comparable units.
- The first contract was ratified in 12 days after initially listing it. The buyer decided he wanted to live somewhere else (that is what I was told) and he walked on the home inspection.
- The second contract, despite having a gainfully employed buyer, a lender letter saying income had been verified and finances run through the mortgage lenders DU (document underwriter) system, the buyer was denied financing due to insufficient funds.
Nothing the seller had done or not done landed him in this situation. What is the best strategy in this scenario?
- Accept that there are several moving parts to a real estate transaction and no one controls the entire process.
- Circle around to the very first consideration of step # 3 of the sales process keeping in mind the time already on the market.
- Work with the information/feedback your agent has collected to decide what adjustments, if any need to be made and when to put it back on the market.
- Remember time is of the essence.
By providing market knowledge and experience that lets clients break down the process step by step, we make their experience a positive and exciting one. A metric for Laurel Murphy Real Estate to gauge whether we are achieving our goal is the percent of business we do from referrals or repeat business.
In our first full year we serviced 50% sellers and 50% buyers with 85% from referrals or repeat clients. Helping family and friends of past clients is a responsibility we appreciate and take seriously. Going into 2020 we have every intention to increase our numbers, one referral at a time.