How Pricing Your Home Right Makes a Big Difference

How Pricing Your Home Right Makes a Big Difference | MyKCM

Even though there’s a big buyer demand for homes in today’s low inventory market, it doesn’t mean you should price your home as high as the sky when you’re ready to sell. Here’s why making sure you price it right is key to driving the best price for the sale.

If you’ve ever watched the show “The Price Is Right,” you know the only way to win the game is to be the one to correctly guess the price of the item up for bid without going over. That means your guess must be just slightly under the retail price.

When it comes to pricing your home, setting it at or slightly below market value will increase the visibility of your listing and drive more buyers your way. This strategy actually increases the number of buyers who will see your home in their search process. Why? When potential buyers look at your listing and see a great price for a fantastic home, they’re probably going to want to take a closer look. This means more buyers are going to be excited about your house and more apt to make an offer.

When this happens, you’re more likely to set up a scenario with multiple offers, potential bidding wars, and the ability to drive a higher final sale price. At the end of the day, even when inventory is tight, pricing it right – or pricing it to sell immediately – makes a big difference.

Here’s the other thing: homeowners who make the mistake of overpricing their homes will eventually have to lower the prices anyway after they sit on the market for an extended period of time. This leaves buyers wondering if the price drops were caused by something wrong with these homes when in reality, nothing was wrong, the initial prices were just too high.

Bottom Line

If you’re thinking about selling your home this year, let’s get together so you have a professional on your side to help you properly price your home and maximize demand from the start.

Expert Insights on the 2020 Housing Market

Expert Insights on the 2020 Housing Market | MyKCM

When closing out another year, it’s normal to wonder what’s ahead for the housing market. Though there will be future inventory issues, we expect interest rates to stay low and appreciation to continue.

Here’s what three experts are saying we’ll likely see in 2020:

Danielle Hale, Chief Economist at realtor.com

“I think the biggest surprise from the forecast is how long the market is staying in this low inventory environment, especially as Millennials are in a major home-buying phase…sellers will contend with flattening price growth and slowing activity with existing home sales down 1.8%. Nationwide you can look to flat home prices with an increase of less than 1%.”

Mike Fratantoni, Chief Economist at Mortgage Banker Association (MBA)

“Interest rates will, on average, remain lower…These lower rates will in turn support both purchase and refinance origination volume in 2020.”

Skylar Olsen, Director of Economic Research at Zillow

“If current trends hold, then slower means healthier and smaller means more affordable. Yes, we expect a slower market than we’ve become accustomed to the last few years…consumers will continue to absorb available inventory and the market will remain competitive in much of the country.”

As we can see, we’re still going to have a healthy market. It is forecasted to be a more moderate (or normal) market than the last few years, but strong enough for Americans to continue to believe in homeownership and to capitalize on the opportunities that come with low interest rates.

Bottom Line

If you’re wondering what’s happening in our local market, let’s get together today.

2020 Luxury Market Forecast

2020 Luxury Market Forecast | MyKCM

By the end of last year, many homeowners found themselves with more equity than they realized, and at the same time, their wages were increasing. When those two factors unite, it can spark homeowners to think about making a move to a larger or more expensive home in the luxury space. That said, now is a perfect opportunity to take a look at the forecast for the 2020 luxury market.

Three Things to Think About in the 2020 Luxury Housing Market

1. Prices

The U.S. economy is strong today, with buying opportunities throughout the luxury end of the market. Thomas Veraguth, Strategist at UBS Global Wealth Management, says in Barrons.com,

“There’s a good link between luxury real estate prices and [economic] growth.”

Available inventory is a key element that can impact home prices. At the upper range, the inventory is greater in comparison to the entry-level market, making moving up to a luxury home a growing reality for many buyers right now.

2. Activity in the Market

With more buying opportunities at the higher end, we should start to see an increase in activity. The same article states,

“Affluent homebuyers will start to come out of the woodwork as they find rising luxury rents less appealing and sellers get even more negotiable on price.”

Buyers looking in the luxury market are taking the opportunity to negotiate on price in a segment where there are more choices, too. According to the Luxury Market Report, homes sold for an average of 96.94% of the list price in December.

Buyers are also getting more for their money with greater purchasing power due to the current low interest rates.

3. Buyers Are Coming Back

Keep in mind, buyers are often sellers too, especially those looking to move up. Homeowners with an entry-level home can take advantage of the inventory shortage at the lower end of the market, thus driving higher sales prices for their current homes. Combined with growing equity in the homes they’re listing, it’s a great time for those who are ready to make a luxury move.

The extra equity and greater purchasing power are bringing many buyers back to the market. The same article mentioned that,

“We’ve already seen buyers who’ve been on the sidelines for two years tread back into the market.”

Bottom Line

If you’re considering entering the luxury market, 2020 is shaping up to be a great year for those who are ready to make that move. Let’s get together to set your real estate plan for the year.

Have You Outgrown Your Home?

Have You Outgrown Your Home? | MyKCM

It may seem hard to imagine that the home you’re in today – whether it’s your starter home or just one you’ve fallen in love with along the way – might not be your forever home.

The good news is, it’s okay to admit if your house no longer fits your needs.

According to the latest Home Price Insights from CoreLogic, prices have appreciated 3.5% year-over-year. At the same time, the National Association of Realtors (NAR) reports inventory has dropped 4.3% from one year ago.Have You Outgrown Your Home? | MyKCMThese two statistics are directly related to one another. As inventory has decreased and demand has increased, prices have been driven up.

This is great news if you own a home and are thinking about selling. The equity in your house has likely risen as prices have increased. Even better is the fact that there’s a large pool of buyers out there searching for the American dream, and your home may be high on their wish list.

Bottom Line

If you think you’ve outgrown your home, let’s get together to discuss local market conditions and determine if now is the best time for you to sell.

5,300 Reasons to Be Happy You’re a Homeowner

5,300 Reasons to Be Happy You’re a Homeowner | MyKCM

Studies have shown that, in many cases, the largest asset a family owns is the house they live in. Over the last twelve months, that asset has gained substantial value.

CoreLogic just released their 2019 3rd Quarter Homeowner Equity Insights Report. The report revealed that:

“U.S. homeowners with mortgages (roughly 64% of all properties) have seen their equity increase by a total of nearly $457 billion since the third quarter 2018, an increase of 5.1%, year over year.”

The equity in a property is determined by comparing the current value of the property against the outstanding mortgage debt. As prices rise, the equity in a home increases.

The report went on to explain that the average homeowner gain in equity over the last twelve months was $5,300.

Here’s a map showing the average equity gain by state:5,300 Reasons to Be Happy You’re a Homeowner | MyKCMSince the housing crash in 2008, many homeowners have felt trapped in their current houses, as they didn’t have enough equity to sell. The gains in equity over the past few years may have freed some homeowners who have a desire to move.

Bottom Line

If you’re curious about your home’s equity, let’s get together to do a market analysis on the current value of your house. You may be pleasantly surprised.

The Biggest Issue Facing Housing Next Year

The Biggest Issue Facing Housing Next Year | MyKCM

This coming year the housing market will be defined by 3 things- inventoryinterest rates, and appreciation.  But the biggest issue the housing market will face in 2020 is an inventory shortage.  There aren’t enough homes on the market for buyers, especially on the lower end of the market. This is a topic that has come up frequently within the past several months.

Based on what is forecasted, we know that interest rates are projected to remain low and that appreciation is expected to continue as we move into 2020.  Additionally, the upcoming election will provoke many unique perspectives on the health of the US housing market. The challenge will be understanding what is actually happening and how you can best position yourself if you are thinking of buying or selling your home.

Here are several perspectives to consider on the inventory issue facing housing next year:

According to realtor.com:

“Despite increases in new construction, next year will once again fail to bring a solution to the inventory shortage that has plagued the housing market since 2015. Inventory could reach a historic low as a steady flow of demand, especially for entry level homes, and declining seller sentiment combine to keep a lid on sales transactions.”

Diana Olick at CNBC:

“Inventory has been falling annually for five straight months, after it recovered slightly toward the end of last year, due to a spike in mortgage rates. Rates began falling again by spring of this year. Homebuilders have been increasing production slowly, but it’s not enough to meet the increasingly strong demand.”

George Ratiu, Senior Economist with realtor.com

“As millennials — the largest cohort of buyers in U.S. history — embrace homeownership and take advantage of this year’s unexpectedly low mortgage rates, demand is outstripping supply, causing inventory to vanish. The housing shortage is felt acutely at the entry-level of the market, where most millennials are looking to break into the market for their first home.”

Bottom Line

The most important thing you can do is understand what is happening in your local market. You may not be able to avoid some of the issues brought on by low inventory, but you can be educated and prepared. Let’s connect and discuss the options that make the most sense for you and your family.

Spend a little money to make more money

In a sellers market, such as the Plymouth/Canton area, it is natural to wonder if you need to spend money getting your home ready for the market if you are thinking about selling. Many Plymouth/Canton homeowners think since inventory is low, that they can save money by not spending money on repairs, updates, or staging. Nearly every month we see examples where sellers save time on the market and net more money in the end by spending the time and money up front to get their home ready for the market.

Save Time

At the beginning of this year we had a referral contact us as they had a rental home where the lease was about to expire. The tenants already contacted the owners to let them know they were moving. It was about this time that the homeowners contact us to walk the property and give them a complete market analysis of the home including updates/repairs, staging advice, and a marketing strategy. Their home backed to a major road in the area and the area was very active. They decided to wait on listing their home while they did some repairs and obtained the city certifications needed to sell. It was awesome as they took almost all of our advice inside and out and the home was in great shape and ready to list. We went and toured their home to work out a timeline. At this point they told us since their home had a lot of traffic they decided to sell “For Sale by Owner”. We advised them that this was not the best choice as it was the hot spring market but offered to help them and guide them as needed. We checked on them ever week and they had a lot of traffic initially. Finally after almost 3 months on the market FSBO they let us take over. We went through our pre-marketing plan and then listed the home with new professional photos and set into motion our custom marketing plan. Within 1 week we had 16 showing and I personally showed the home twice. We sold the home for the exact list price that they had the home listed for almost 3 months. At the closing my clients looked over and asked why they didn’t listen months ago.

Make More Money

In another example, our team helped a seller just a few months ago. We consulted with the homeowners just after an identical townhome went under contract. After meeting with us, they spent $3,000 on painting their home, de-cluttering and getting it staged. The result was a bidding war that ended up with them getting a cash offer that was $15,000 higher than they thought they would get and $5,000 higher than the other similar unit.

The Bottom Line

No one likes to put money into a home they are about to leave, but more often than not that upfront investment will save you time on the market, make you more money and create a lot less stress throughout the process. So where should you spend your money?

  • If there are any obvious repairs needed start there. Not only will these items scare away offers, but they will become negotiating items on home inspections.
  • Get a fresh coat of paint. Make sure you go with neutral colors.
  • Stage the home or hire a professional stager. Our team will give you advice on staging or hire a professional in the listing process because we think this part is so important.
  • Consider making some updates if needed. Updating appliances, flooring and countertops can also go a long way.
  • Give your home some curb appeal. Make sure the home looks great from the outside.

Finally, do not let your efforts go to waste.

Over 90 percent of buyers see your home first online. Make sure the photography puts it in its best light. Nothing is worse than spending the time and money to get your home ready for the market and then cutting corners on the photography and wasting those efforts. Our team includes high quality photography and online videos optimized to attract more views than our competition so that you home is seen in its best light by the highest number of buyers.

If you have any questions about how to get the biggest bang for your buck when selling your home, for more information about our team check us out at www.robertyoder.com or email robertyoder@remerica.com or call/text 734.718.8668 at anytime.