Real Estate Market Update December 2013

The end of the year is approaching and it was a great year for real estate. Locally we saw an increase of 8% in the number of transactions and a 5% increase in the average sales price. That means more homes are selling at a higher price.

Why the increase? There has been a lack of inventory for a while. Normally there are about 1.5 million home starts (new construction) per year. As of the past few years, though, that number has been more around 400,000. There is a lack of homes but interest rates are so great that buyers have been rushing onto the market.

I expect the next 18 months in our market to be fantastic. We should see more sellers participating giving buyers more options.

You can expect a great 2014. I also wanted to take this time to wish you a great, happy and  wonderful Holiday Season.

If you need anything, please give me a call!

Happy Holidays!

December is here and as 2013 comes to an end, I can't help but reflect on what an amazing year we've had. I am so appreciative of you and all your referrals. I want you to know that I look forward to serving you again with enthusiasm, diligence and commitment. I also wanted to wish you a wonderful and safe holiday season. If there is anything I can help you with, please call me!

Should you sell or buy during the holidays?

Welcome back to my video blog. November is here and Thanksgiving is just around the corner. I always get asked whether now is a good time to buy or sell. Well, let’s take a look at your situation.

If you are a buyer, there are phenomenal interest rates going on right now. The truth is we have no idea where those rates will be in 5-6 months; they could increase. If you want to lock in that low rate, take a look at what’s in the market.

If you are a seller, listing your home now means less competition. There are fewer homes on the market, making your home a prize to buyers. It’s important to also know that buyers are much more motivated; they aren’t just taking a Sunday drive. These buyers are ‘have-to-buy’ buyers. So while you may have fewer showings, the quality of buyers is incredible.

If you are thinking about buying or selling, please give me a call so we can get stared on a buying or selling strategy for you.

Thanks for watching! I wish all of you happy and safe holidays!

What Sellers Can Expect from the Negotiating Process

Thanks for joining me today!

In the last video, I talked about what you can expect from the negotiation process when buying. Today, let’s talk about what you can expect when you’re selling!

Most of the time when you receive an offer from a buyer, you’re most excited to hear the price.

When I go through a contract, though, I like to start backwards. There’s a lot more to an offer than just the price.  It’s important to look at when the buyer wants to move in, whether they are preapproved, are there any contingencies, etc.

When a buyer makes an offer, price is only one of the determining factors in whether you should accept or not.

If you have any questions, please give me a call. I’d love to help you sell your home!

What a Buyer Can Expect from the Negotiating Process

Welcome back to my video blog!

Over the course of my career, I’ve completed a couple thousand transactions. Buyers and sellers are always curious about how offers are actually constructed. What can they expect from the negotiating process?

Over the next few videos I want to help answer your questions. Today, let’s talk about what a buyer can expect.

When we construct an offer for a buyer, we look at three different components.

1. Does the purchase make sense? - The whole point in buying a new property is finding something that fulfills your needs: square footage, bedrooms, location, etc. Is it better than where you are staying now?
2. What are their finances? - The buyer needs to be preapproved and they have to be comfortable with the outlay of cash.
3. Does the value match the price? - A buyer wants to know they are getting a good deal. Is the property worth what they are paying?

These are the three most important elements to consider when it comes time to make an offer. In the next video, we’ll go over what a seller can expect.

Thanks for watching!

Government Shutdown Risks Hurting The Housing Recovery

From: http://www.forbes.com/sites/morganbrennan/2013/10/01/heres-how-the-government-shutdown-will-affect-housing/

By:  Morgan Brennan, Forbes Staff

The government shutdown is here. Whether it’s not being able to get a new Social Security card or visit a national park, Americans will immediately feel the effects. But there’s one bright spot of the economy that stands to be affected as well: housing.

One of the biggest questions regarding the shutdown and how it will affect housing has revolved around the mortgage market, specifically prospective buyers’ access to new home loans. After all, more than 90% of all loan activity is underwritten, insured, or owned by the government and its affiliated entities.

Initially at least, the mortgage market is likely to be only minimally impacted. New loans will continue to push through most government agency pipelines. What will change is how long the process takes, as many agencies expect to experience delays.

Mortgages purchased and securitized by Fannie Mae and Freddie Mac will be unaffected because their operations are paid for by fees charged to lenders. And the Department of Veterans Affairs will continue to guarantee mortgages for Americans that have served in the military since these loans are funded by user fees as well.

But if the government shutdown of 1995-1996 is any indicator, the process will take longer than usual. “Loan Guaranty certificates of eligibility and certificates of reasonable value were delayed,” the VA warned in its September 25th contingency plan.

Where there has been mounting concern is the Federal Housing Administration, which currently endorses about 15% of the entire single-family mortgage market. Several media outlets recently reported that the FHA would be unable to endorse any single-family loans and that no staff would be available underwrite and approve new loans.

That prospect would be somewhat worrisome – if it were actually true. The FHA’s Office of Single Family Housing will indeed remain open for business, albeit with a smaller staff. “FHA will be able to endorse single family loans during the shutdown. A limited number of FHA staff will be available to underwrite and approve new loans,” the report now states. In other words, other lenders’ loans will continue to be insured and some in-house lending will continue to take place at a reduced rate.

The reason for that mix-up: the initial draft of the U.S. Department of Housing and Urban Development’s contingency plan mistakenly stated that single-family loan operations would cease. The report was amended over the weekend.

The FHA’s single-family loan operations are funded through multi-year appropriations, meaning their budget is not tied to the government’s standoff over funding for the new fiscal year that starts in October. On the other hand, what will be more affected is the agency’s Multifamily Housing Office, which is funded through yearly appropriations.

“Because we are able to endorse loans, we don’t expect the impact on the housing market to be significant, as long as the shutdown is brief,” continues the HUD report. “If the shutdown lasts and our commitment authority runs out, we do expect that potential homeowners will be impacted, as well as home sellers and the entire housing market.”

One government lender that will indeed suspend its home loan activity, however, is the Department of Agriculture. The USDA says that no new housing loans or guarantees will be issued through its Rural Development programs in a shutdown. The department also warns that such a scenario could cause “a setback in construction start-up,” and if the shutdown lasts for an extended period, “a substantial reduction in housing available in rural areas relative to population.”

“The government doesn’t generally approve loans, they basically just insure them,” says Don Frommeyer, president of the National Association of Mortgage Brokers and a vice president at Amtrust Mortgage Funding. “For the most part you aren’t going to see much of a hit in the mortgage market unless it goes for a long period of time.”

If it does stretch on, he adds, the worry will be what mortgage rates do in a market shrouded in fiscal uncertainty and how that will affect the home buying, especially in light of recent rate spikes.

Home lending aside, many economists and real estate experts are keeping a close watch on how Americans will react to this shutdown. “Administratively everything should keep moving along, but it’s more about the confidence of consumers and whether they perceive that the government shutdown could lead to a recession,” says Lawrence Yun, chief economist at the National Association of Realtors.

Moody’s Analytics chief economist Mark Zandi recently told the Senate Budget Committee that a partial shutdown could shave as much as 1.4 percentage points off of fourth quarter economic growth if it drags on for several weeks.

Americans’ confidence in their ability to buy and sell homes hit a record high in May, according to a Fannie Mae survey. Since then, as mortgage rates jumped more than a percentage point, that confidence level has plateaued.  If prospective homebuyers fear that the country’s economic recovery will stall, or worse slip back into recession, they will pull back on purchases, worries Yun.

“Home sales is always the first housing variable that changes so one would see sales declining and that would naturally lead to more inventory on the market and eventually put pressure on prices,” he says. But that would be a worst-case scenario based on a long-term shutdown.

Jed Kolko, chief economist at Trulia TRLA +6.43%, notes that if the shutdown lasts longer than a few days, the first places to feel the impact will be local economies with large concentrations of federal government workers. Metro areas like Washington, D.C. and Bethesda, Md., where 19% and 13% respectively of total local wages go to federal employees, would be the feel the negative effects of unpaid furloughs and with them, tightened consumer spending and weakening local economic growth. Though not all will be equally affected, other metro areas like Virginia Beach, Va., Honolulu, Hawaii, and Dayton, Ohio are areas that Kolko is keeping an eye on: “Whether there is a big effect depends on how long the shutdown lasts, how long people think the shutdown lasts, and whether people get back-pay. All those things matter for the impact.”

Still others are worrying even more about the next fiscal standoff, in  mid-October, surrounding the debt ceiling debate and its accompanying threat of debt default by the U.S.  ”With the threat of an impending partial government shutdown and yet another battle over the nation’s debt ceiling, in particular, we are really messing with fire right now—even if it doesn’t seem to bother some legislators,” says Stan Humphries, chief economist at Zillow.

“But the effects of a government default associated with the impending debt-ceiling deadline would be more pronounced because of its greater impact on domestic and international markets. This will rattle consumers and investors alike, slow down the overall economic recovery and further slow the housing recovery, which is already undergoing a moderation in the pace of home value gains due to rising mortgage rates,” he warns.

How You Can Get the Highest Return on Investment Part 2

Hey, everyone! The last time we talked we discussed return rates on home investment projects. Today, I have a few more projects homeowners ask me about.

1. Garage doors - Much like the front door, the garage door is one of the first things a buyer sees. Replacing your dented and damaged garage door can get you a 75 percent investment return.
2. Kitchen Renovations -  This can be replacing cabinet doors or countertops, etc. Such renovations are expensive but they add tremendous value to your home and you can enjoy a beautiful kitchen while you are living there. You’ll get about a 75 percent return as well.
3. Windows - Replacing windows can be an expensive project, but along with adding an aesthetic element it also can save you money on your electricity and heating bill. Expect about a 73 percent return.
4. Renovating the attic into a bedroom -  Again, you will see about a 73 percent return.
5. Finished Basements - Your return depends a lot on what kind of basement you have: is it a walk out? Are there windows? How many features were added to the basement? On average, you can expect about a 70 percent return.
6. Second-story addition - This is a major renovation and not as much of an investment return at 65 percent.
7. Bathroom remodeling - This could be replacing fixtures and other minor updates; you can expect a 65 percent return.

These are few things that can add value to your home. Each property is different, so give me a call and we can discuss how we can add value specific to your home’s needs.

Thanks for watching!

How You Can Get the Highest Return on Investment Part 1

Hey, guys. We’ve been talking a lot about price increases lately. In fact, in the last 12 months we’ve had the highest price increases since 2006.

Because of this, a lot of homeowner’s have finally gotten around to those home projects they’ve been avoiding. A lot of homeowners want to know what type of financial return they can expect from their projects.

Well, for the average project you can expect about a 60 percent return. I have a list, though, of some things you can do to improve your home and get a higher return!

1. Front door. Your front door is the threshold of your home. It’s one of the very first impressions the buyer has. Find a complimentary color and a design that matches the home. You can expect around an 86 percent return.
2. Siding. It’s important for your home to be up-to-date. A popular siding is hardiplank. Adding or replacing siding can give you an investment return of around 80 percent!
3. Deck. Everyone loves a good deck to enjoy beautiful weather or to have friends over for entertaining. If you build a sizable deck (around 10x16) you can see a return of 77 percent.

These are just a few things that add tremendous value to your home. Next week I’ll have even more for you!

If you have any questions, please give me a call at 814.880.2308!

How Can a Seller Be Involved In the Process of Their Home?

Welcome back to my video blog!

What can a seller do to help during the process?

 I believe in four different things that can help get to a successful closing:

1.    Price: Buyers in this market are educated and they don’t want to pay too much for a home. Pricing properly is important because you don’t want to leave money on the table and you also don’t want to turnoff the buyers.

2.    Presentation: Sellers want to be able to see themselves living in your home. Sellers need to de-clutter and depersonalize the home; make sure it’s clean and in good condition.

3.    Buyer Home Warranty: A warranty really makes the buyer feel more comfortable with purchasing the home in case anything were to happen in the first year. For $400, you can enhance the value of your home by thousands.

4.    Compensation: Real estate agents are trying to make a living like everyone else. Offer a competitive commission rate so your agent is excited and motivated to sell your home.

These are four important sellers’ tools! Thank you for joining me. If you or anyone you know is considering buying or selling or if you just have some questions, please give me a call!

What's Changing the Momentum of Our Market?

Is anything happening right now that has affected the momentum of the market?

There has been a lot of excitement about how the market has turned around nationally and locally. We’ve had inventory issues, a surge of buyers, etc.

I think sellers are starting to feel a lot more robust about things and maybe a little bit over confident. Interest rates are starting to rear their ugly head.

As agents, we have to be concerned with buyers and their pre-approval letters. If they have a pre-approval from three months ago, but interest rates have increased by a point, that changes the game. If you are looking at a home for $360,000, your payment has gone up by $300 a month. This is a huge impact on the amount of money a bank is comfortable with lending as well as a huge impact on what a buyer can financially do.

So, sellers need to recognize now is the time to put their home on the market before interest rates increase more.

Give me a call at 814.880.23208 so we can get started on your next real estate move!

What Can We Expect for the Rest of 2013?

Check out our Free Home Value Report to see how much your neighbors sold their homes for!

What price points are selling and what can we expect to see the rest of the year?

Any homes priced up to $250,000 are doing remarkable. If a home is priced fairly and in good showing condition, it can sell in a matter of days.

There is also exciting news for homeowners in the higher price range. Currently in State College there are five active homes on the market and eight in pending sales. That is a great ratio of homes under contract vs. homes available.

There are only about 750 active listings. Unless there is an increase in inventory, it will remain a sellers’ market. Buyers made be frustrated with their limited selection, but builders are starting to dig and build again. A great sign for our economy!

Market Update June 2013

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What are the common misconceptions about the state of the current market?

The market is clearly changing and there are two common misconceptions about what is happening. The first of which is some sellers are afraid their home won’t be received well on the market; that it is still a poor sellers’ market. This fear, along with lack of new construction and a boom of nuclear families is a main reason for the lack of inventory.

The other misconception is the opposite. Some sellers are a tad overzealous about the market and feel they can sell their home at any price and in any condition. It’s important no matter how great of a sellers’ market it is that your home be priced properly and in good showing condition.

If you want to sell your home, call me at 818.880.2308 or send me an email at christurleykbb@comcast.net.

Choosing a Real Estate Agent That Invests in Themselves Pays Dividends In Your Home Buying and Selling Experiences

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Getting a real estate license is easy. In most states it’s a matter of taking a class, putting in some hours of classroom time or even online and then taking a test. But the real test is out in the real world. Until there is ample experience, knowledge gained that comes from that experience and the track record developed from years of working on successful transactions (even unsuccessful ones), you won’t really know if your agent is cut out for it. As your neighbor, friend and member of the same community – I’m here to tell you what sets me apart from the rest.

A Commitment to Constant Improvement

Each year, I spend a lot of time – plenty of money and the energy that goes along with a long-term commitment to self-improvement. I invest in my team, with a commitment to gain leverage with unique industry techniques that continue to set my team and I apart. I make sure to be on top of all the latest technology, tools and innovation that ultimately translates to better business for me and top-notch results for you.

The bottom line is that you want the best home buying or selling experience possible. And I make sure I do what it takes to be equipped with those skills and knowledge necessary to make it happen.

Today’s video is coming to your from Toronto, where we’re at the latest Mike Ferry Organization conference. Mike Ferry is an international real estate coaching expert. Google him and you will find millions of hits with success stories, a long track record of innovation and solid marketing concepts. Every time I attend one of his conferences, I walk away with a newfound wealth of knowledge and immediately apply that knowledge so my clients can reap the benefits and enjoy the positive impact of best-in-class business. Not only that, at each one of these events I am met with countless other of our nation’s top-producing agents. We share and compare each others’ secrets to success and we openly discuss what works in today’s market. The Mike Ferry Organization constantly updates me on what’s new and in turn, I pass it on to my buyers and sellers; all the while remaining accountable.

Wouldn’t you want to work with someone that values what they have to offer you? Real estate is an ever-evolving industry that continues to generate new and exciting concepts. I’m proud to share that in my quest to constantly improve the way I do business, my clients also benefit and prosper.

To start getting best in class service, I invite you to call today for a customized consultation so we can talk about your home buying or selling needs.

100 Questions Every Home Seller Should Ask

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There is a lot that goes into selling a home and as you might imagine, there are equally as many things to consider before, during and after the process. That’s why we’ve developed a comprehensive list of 100 questions that every home seller must ask before the process even begins.

Now, when you sit down with us and we go over the details, you will have an upper hand with all the advanced preparedness you can imagine that comes with knowing the right questions to ask. Here, we’ve covered some of the more prevalent ones and included a link to the entire list below.

Pre-Listing Preparedness, Home Value and Timing

One of the most critical aspects of selling a home is to know whether or not the time is right. This factors into the homeowner’s personal timing and also current market performance. Important questions to ask include things like “how quickly do I want to sell?” and “do I need to consider making an interim move?” The answers will not only help you to determine the perfect time to list your home but also make for a more successful transaction overall.

Home values are key to this stage of selling a home because this is where many homeowners’ are pointed toward realistic expectations – which in turn aids them in the decision making process. Knowing the market value of your home can have a significant impact on your decision to sell.

Agents, Agency and Contracts

Like timing and market conditions, selecting the right agent is also key to successfully selling your home. Once the right agent is on board, the next thing to examine is agency and the relationship between you and the selected professional. Agency can be confusing and complex but by asking and learning the various roles each type of agency plays, you will be an informed seller that knows exactly what to expect from your agent.

Yet another vital component of selling a home entails a detailed understanding of the contracts involved. Listing agreements, agency disclosures, seller and lead-based paint disclosures – are just a few of the many documents you may need to review or sign. To ask “what are the contingencies I can expect to see on a typical offer?” or even inquiring about the timing between an accepted offer and the required inspection period will help you gain an edge.

Advertising, Marketing and Offers

When you set out to sell your home do you know how it will be marketed? How do you feel about open houses? What are the statistics for open houses in your area and are they effective? Something you will hear time and again through many sources is the subject of preparing your home for sale. You will be advised to neutralize the décor, remove clutter, make any necessary repairs and so much more. Throughout doing all these things there will be some expenses incurred – so ask yourself if you are ready to make that investment to get your home sold.

Finally, when you do have an offer or more than one comes in – what do you need to do next? What is a reasonable counter offer without putting off the prospective buyer? In today’s market one thing occurring in many areas is the issue of multiple offers. If that does happen, have you considered how you might handle it? Our list of 100 questions will share the essentials of these and many more concerns that you may not even realize you ought to consider.

Finances and Closing

Oftentimes people are selling a home that they have lived in for quite some time, and as a result they are out of touch with today’s marketplace. An issue that may come to the surface is present day mortgage and finance practices. You want to ask things about the HUD-1 Statement, tax proration and escrow. Also important to know are lending guidelines, for example the fact that most sellers today are in the strong position to request or require a mortgage pre-approval letter with an offer. You will also benefit from knowledge about closing documentation to expect on closing day.

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Remember, the number one question that is asked by sellers is “When is the best time to sell my home?” and the answer is simply, “When you are ready.” Though there is the common misconception that homes do not sell during year’s colder months, sellers should bear in mind there is plenty of activity in the market year round. There are indeed fewer buyers out there but equally, there are fewer homes on the market, leaving you less selling completion to worry about.

In our region alone we have had a ten percent increase in sales year over year despite a somewhat depressed market. The news is good and if you have been on the fence about selling your home, this may be the perfect time to talk to us and ask that all-important question, “Can you sell my home for top dollar, in the least amount of time and without any hassles?”

Click Here for the full list of 100 Questions Sellers Should Ask >>

Brush Up the Look of Your Front Steps

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Curb appeal gets buyers in the door.  If you want to spruce up the front of your home without spending a lot of money, consider painting your front steps.  Typically choose darker colors to hide wear and tear.  Colors from nature and from the same family are a great choice for a craftsman-style home.  With other styles of architecture choose cool gray because it compliments every color and even when it gets dirty, it maintains its look.

Home Inspections; a Critical Piece of the Home Buying Puzzle

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Buying a home is undoubtedly the most expensive purchase of most people’s lives and it goes without saying that you should proceed carefully and in a way so as to make good decisions. One very important part of making a good decision on buying a home is getting a full-blown home inspection of the property.

We’ve all seen the nightmare stories on television where a homeowner that neglected to have a home inspection done, ends up with a huge money pit. The easiest way to combat that risk is to get a thorough check-through by a licensed home inspector.

Though inspectors are required by State licensing boards to maintain licenses and stay up-to-date on their education, there are bad inspectors out there that fail to properly check a home. It’s important that you select a good inspector. One great resource is your real estate agent because they have worked with countless other buyers and they usually have a list of preferred vendors they recommend.

Common Issues That Come Up in Home Inspections

As you can imagine, many things can come up as a professional goes through each aspect of your home’s function, structure and systems. Some of the more common issues that arise include problems with the home’s electrical panel, some circuits with blown fuses, a circuit breaker with problems that could cause a fire hazard.

Sometimes chimney problems come up too that might not be visible to the layperson. Anything from cracks in the chimney, gaps that could contribute to heat and cooling loss or issues with the roof – all come up with a thorough inspection.

Buyers Learn a Lot About Their Home During an Inspection

Probably the most overlooked benefit of a home inspection is the ability for buyers to get a walkthrough with the inspector and see how everything functions. While the inspector is looking over everything, the buyer will be able to learn how to operate things in the house plus get an overview on basic home systems.

The Housing Market Finds Its Strength

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The real estate market is certainly gaining strength. According to national year-end reports, we’re clearly seeing a turnaround. One sign is the days it takes for a home to sell is down by 29.6% nationally over the previous year. Top that off with a shift in the amount of inventory—from an overabundance to an actual shortfall of homes available for buyers—and you can see why the housing market has strengthened. The inventory shift from too many homes on the market to a shortfall was due to two main reasons: investors purchasing foreclosures and people taking advantage of interest rates that hovered at record lows during 2012. These factors, as well as a lack of new construction, are leading the country to a turnaround in real estate. We’re seeing these factors in many markets across the U.S.  

What’s happening locally in our region is all very positive. Our actual number of transactions was 113 sales—an 11.15 % increase over last year. That’s a big increase. In State College, home sales were up 17% which means the largest school district within our region is doing as well as or better than the rest of the region. The days a home is on the market is down a medium of 40% in our region compared to 29.6% nationally, so homes are selling much more rapidly in State College than last year. We’re also shifting from an absolute buyers’ market to a much more balanced market which is healthier for both buyers and sellers.

Keep in mind that interest rates are still low, but the rates won’t last forever. These rates have helped make home-buying more affordable. We’re also seeing “shovels turning” with new construction making a comeback so that gives buyers another option.  

There’s reason to be cheerful in 2013. We’re starting the year off right with an overall confidence in the real estate market that we haven’t seen in the last couple of years. The mood has changed—and it’s great!  

If you’re interested in buying or selling your home, contact me today at 814.234.4000 or christurleykbb@comcast.net. I would be happy to assist you.