Chicago and Maui Real Estate for Buyers, Sellers, Renters and Investors
Every Month or so my good friends over at KCM take a snap shot survey of home prices and their future predictions. Today they released their findings from 5 national home price indexes. The good news? It’s unanimous belief that home prices will increase in 2013 vs. 2012. The amount? A modest 2.4%.
See this link for the full story: Where Are House Prices Headed?.
Many homeowners are excited to list their homes for sell, as they begin to dream about new opportunities and their future plans. However one aspect they can get carried away with is the pricing. Many times I’ve heard, “let’s price it high, and we’ll negotiate it down.” That is not always the right plan, and more often than not, it does not lead toward the most money for the seller.
This was reported previously by Ken H. Johnson ,Ph.D – Florida International University and Editor of the Journal of Housing Research. He has studied “proper pricing” and concludes: ” On average, properties which experience a listing price change take longer to sell and suffer a price discount great than similar properties.”
The statistics that I can run through the MLS Data here with the Chicago Board of Relators confirms this statement as well. The more price changes, the longer the home will be on the market, and in the long run, the less the home sells. Not too mention the cost of perhaps two mortgages (the new home and old home) or delaying a move.
Bottom line – pricing is still king, and getting it right to begin is the most important factor.
Please do reach out to me if you have any additional questions.
Cheers,
Matt
One of the most common questions I receive deals with timing. Is it the right time to buy? Should I sell now or wait another year? In the end, these are questions that only you can answer. As a Realtor, I can help by giving you the current market facts, and what we are expecting to see – but alas, if I could read the crystal ball, I think I’d be living on an Island somewhere with warm clear water surrounding me!
Particularly in Chicago, homes have begun to fly off the selves as buyers jumped off the sideline and begin purchasing in mid-January, this has not yet slowed down. But will this increase in sales begin to show an increase in sales price and home values? Sure, simple supply and demand tells us that if supply is down, and demand it up, then prices will go up as well – but is supply really down?
It’s interesting to note, that not everyone is on the same page here. Just look at National Association of Realtors (NAR) Chief Economist, Lawrence Yun, “This time next year, there could be a 10% price appreciation.” He said this in June at a Real Estate conference in Denver, CO. Compare that quote to a report from Morgan Stanley during that same week: “We estimate a drop of 5 – 10% more (in real estate prices).”
Who do you listen to? That is the big question, but the answer is simple. You need to collect as much data as possible, and use your Realtor as a source of information.
Inman new recently released a survey conducted by Pulsenomics LLC on behalf of Zillow showing expected home pricing growth. This group of 114 participants expect to see a growth or increase in the average home value for U.S. single family homes. We’ll see if this comes to fruition or not.
For the full story – check out the original post by Inman News here: Economists expect 2013 home price rebound | Inman News.
My friends at Keeping Current Matters have released another interesting set of information. This time a quarterly report from Pulsenomics who survey a distinguished panel of over 100 economists, investment strategists, and housing market analysts regarding their 5-year expectations for future home prices in the United States.Here are the results of their latest survey:
2012: -.4%
2013: +1.3%
2014: +2.6%
2015: +3.2%
2016: +3.5%
The average pre-bubble (1987-1999) annual appreciation was 3.6%
If you have wondered why the Foreclosure process takes longer in some states vs. Others – check out the map above. States that have a “Judicial” foreclosure system means that all of their foreclosures must be handled through the court system – thus extending the length of time it takes for a foreclosure to occur.
This may help the homeowner stay in their property longer. However it very well may also keep the property from being able to be re-sold quicker as well – adding to blight and the “shadow inventory” of distressed properties.
I’ve always believed that Real Estate was the ultimate Supply and Demand economic index. It appears we are starting to see this again depending on where you live. The Spring season has been strong throughout most of the USA. Though certain areas have begun to see multiple offers again, it does not necessarily mean that prices are starting to increase greatly. There still is a good amount of shadow inventory (distressed properties that banks are slowly getting selling) in many states.
Keeping Current Matters has just released an interesting quick read on this very subject. Check out the full article here: Home Prices: It’s About Supply. There are also some good links to other information (such as State by State shadow inventory). One (I should say two) things I found interesting:
Some good food for thought as you head out looking to buy this season.
Licensed Realtor.
Twitter: @mattpauli
Website: MattPauli.com