KEEP YOUR EYE ON THE MARKET

How important is it to keep your eye on the housing market in your town or the town where you want to live?  Here are five reasons for your consideration. 

1. Financial Planning: The housing market directly impacts property values and rental prices.  Keeping an eye on it helps individuals make informed decisions about buying, selling or renting properties, which is crucial for financial planning and long-term strategies.

2. Affordability: Fluctuations in the housing market can affect affordability.  Monitoring trends allows individuals to anticipate changes in property prices and mortgage rates, enabling them to make timely decisions about purchasing or renting a home within their budget.

3. Local Economy Indicators: The housing market often reflects the overall health of the local economy.  Observing housing trends can provide insight s into employment opportunities, economic growth, and potential shifts in demographics, all of which influence the desirability and livability of a location.

4. Quality of Life Considerations: Changes in the housing market can impact the availability of amenities, such as schools, healthcare facilities, and recreational areas.  By staying informed about housing developments, individuals can assess how these changes may affect their quality of life and future plans for themselves and their families.

5. Risk Management:  Understanding the housing market helps individuals mitigate risks associated with real estate investments.  This includes identifying potential housing bubbles, evaluating market stability, and anticipating regulatory changes that could impact property ownership or rental agreements.  Keeping a vigilant eye on the housing market allows for proactive risk management and informed decision-making.

NATIONAL ASSOCIATION OF REALTORS LAWSUIT SETTLEMENT

 

On Friday, March 15, 2024, the New York Times released a news item indicating that the National Association of Realtors had reached a settlement agreement regarding the commission lawsuit.

This report and subsequent items released by other news outlets and podcasters related a host of scenarios on the impact of this settlement.

One line in the whole New Times story states that a federal judge still had to sign off on the agreement. The upshot of this statement is that the basic outline of the terms of the settlement were in principle acceptable for this time. The settlement put a halt to NAR's efforts to appeal the verdict in the trial.

Moving forward could there be modifications to the terms of the settlement? Yes, is the simple answer. The final terms of the settlement are anticipated by mid-July 2024.

Now is the time for realtors to educate their clients - both sellers and buyers - to the basic principles of this settlement. How efforts are forthcoming to change the way commission fees are negotiated. (Commission fees have always been negotiable.)

This is a story whose end is still being written and as final details are made known smart realtors will have pre-positioned themselves to seamlessly move forward.

THE PSYCHOLOGY BEHIND THE SPRING HOUSING MARKET

Spring is in the air and signs of "new life" are all around.  For many, it is also the perfect time to begin thinking about moving.  Let us take a moment to explore the psychology behind the Spring Housing Market.

1. Ideal weather - who would have thought that weather would be a key factor in the Spring Housing Market, but it is.  Buyers can enjoy longer daylight hours, milder temperatures all ideal for housing hunting.

2. Natural increase in demand - Spring provides excellent motivation for buyers to consider moving, especially those with children.  Makes for an easier transition to the new school district over the summer months. Major companies transfer more  employees during the spring months for just this reason.

3. Spring usually bring better market conditions - Spring favors the seller as competition amongst buyers often leads to multiple offers on a property and mortgage rates tend to be lower. 

4. Buyers take advantage of "time" - Weekends now can be dedicated to attending more open houses and scheduled showings.  However, there is a sense of urgency which can lead to faster sales and quicker closings.

5. Increase in the number of houses on the market - Buyer know that with the increase in housing inventory, there are more opportunities to make a "smart deal".  Sellers know that with the right marketing strategy they can attract more buyers and increase their chances of selling their home quickly.

Bottom Line: Spring remains the most active time of the housing market cycle.  Smart buyers and sellers alike take advantage of this time of year to practice the art of the deal.

WHY ARE HOUSING PRICES STILL ON THE RISE?

Buyers are stunned as they look over the inventory of available homes on today's market and wonder, "Why are housing prices still on the rise?"  

There are three factors which contribute to the continued increase in housing prices in 2024, so, lets look at three key factors.

In no particular order:

1. Inflation: Despite the best efforts of the Fed they have yet corralled the fluctuating inflation. Home buyers and sellers, who will later become home buyers, see this as a sticking point. The cost of goods and services rises in the face of the best efforts of the Fed to bring inflation down to a sustained 2%. 

2. Interest rates: A close cousin to inflation is the wobbly 30-year fixed rate mortgage.  Many buyers look at 7% and withdraw into a cocoon.  Younger buyers have never experienced mortgage rates in the mid to high teens like folks in the 1980s.  They retract in system overload.

3. Inventory: Okay, lets get down and dirty for a few moments and agree that the lack of inventory across the market is the "elephant in the room".  For all the reasons cited above sellers are comfortable in their 0-3% mortgage rates and don't see a pressing need to jump into the buying market that is 4% higher than their current mortgage.  

Bottom Line: Hope springs eternal and just as the sun rises in the East there will be a correction in the housing market which will see an increase in existing home sales and new home construction.  The opportunist who looks around the curve can and will see the signs of a change and reacts accordingly.