It’s The Price That Sells A Home

You’ve heard the old saying – “Location, location, location.”

The real truth is “Location, condition, and price.” And price trumps every other factor.

Location affects the value of a home, but it’s price that sells a home.

Oceanfront, mountainside, or penthouse, the most desirable location in the world won’t sell at the wrong price.

Every property has a potential buyer, but like rock, paper, scissors, it’s sometimes hard to know which factor is going to win the showdown.

A good location will sell at a fair price. A bad location will sell at a fair price, too. It just won’t be as a high as it would be for a good location.

A home in good condition will sell for a fair price. A home in poor condition will also sell at a fair price. Again, it won’t be as high as a comparable home in better condition.

But neither location or condition will sell any house. Only one thing does that – price.

So if you’re a seller waiting for that “special buyer” who will appreciate your faded pink and black bathroom tile, your vintage orange shag carpet and is willing to help you put your kids through college because of your real estate prowess, you’re going to have a long wait.

So if your home is represented by an agent, and it’s been on the market for a long time, chances are it’s your own fault.

Maybe you didn’t listen to your agent when he said you’re pricing your home above the market. Maybe you got mad at the first few folks who looked at your home and didn’t make offers.

When the showings stopped completely, maybe you accused your agent of not doing a good enough job.

You put the blame on everyone except where it belongs – on you. It’s not about you, what you want, or how much you need for your retirement.

It’s about the price.

Written by   on Monday, 20 January 2014
Source: http://realtytimes.com/consumeradvice/sellersadvice1/item/27235-20140120-its-the-price-stupid

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Record-Setting Year For Metro Denver Home Sales

Metro Denver homes sales in December capped a record-setting year of price gains and volume, according to the latest reports from Metrolist Inc.

The average sales price in December stood at $306,910 — a 7 percent increase from December 2012’s average of $289,926. Buyers snapped up 3,229 homes last month, down 5 percent from the 3,400 sold a year ago and down 8 percent from November’s 3,500 sold level — but a dip in home sales is normal for December.

But looking at the year-end volume, there were 17 percent more homes sold in 2013, at 54,024, compared to 46,299 sold during 2012. Year-end average sales price was up a healthy 10 percent from 2012’s year-end average of $279,601.

“The Denver metro area real estate market saw all-time highs in 2013 for both home sales and average price,” said Kirby Slunaker, CEO and president of Metrolist. “While the market cooled slightly at year-end, as one would expect, the numbers year over year are just incredible.”

Metrolist, of Greenwood Village, is metro Denver’s multiple listing service, a database of home sales activity for real estate professionals.

Some year-end data highlights:

• A record number of single-family detached homes sold, 42,762, eclipsing the prior record of 41,682 set in 2004.

• Condo sales spiked 23 percent in 2013 through November, to 11,262 over last year’s 9,135.

• The days on the market average continued its downward trend, dropping 25 percent to a 58-day average.

• Inventory levels dropped too, to 101,208 homes — down 16 percent from 2012’s 121,019.

“Our brokers and agents have seen a very busy year with a record-setting selling season,” said Slunaker.

Here’s some December highlights:

• Inventory levels stood at 7,272 homes, down 18 percent from November’s 8,905 and down 6 percent year over year.

• Average days on the market stood at 57 days, up 30 percent from November’s 44-day average and down 22 percent from 73 days in December 2012.

National real estate companies including CoreLogic Inc. and S&P/Case-Shiller also have reported strong numbers from Denver’s market in recent weeks.

By Dennis Huspeni
Source: http://www.bizjournals.com/denver/blog/real_deals/2014/01/record-setting-year-for-metro-denver.html?ana=e_du_pap&s=article_du&ed=2014-01-08&page=all


What’s Ahead For 2014 Housing Market

The housing recovery hit high gear in 2013 with bigger than expected price gains and solid home sales. This year isn’t likely to be as exciting. Rising mortgage interest rates will price out some potential buyers. Instead of double-digit price gains, look for single-digit ones, economists say, while existing home sales remain at last year’s level.

Sound boring? “You want boring in the housing market,” says Svenja Gudell, Zillow director of economic research.

Here’s what’s ahead for:

• Home prices. They were the highlight of the 2013 housing market, up 12.5% in October year over year, CoreLogic says. Prices are now 20% off their 2006 peaks after falling more than 30%, shows the Standard & Poor’s Case-Shiller index.

Economist John Burns looks for a 6% gain in 2014. Many others see smaller increases ahead. Zillow forecasts just a 3% rise.

Prices will likely rise more slowly as more homes come on the market, fewer investors bid for homes and higher ownership costs — including interest rates and home prices — take a bite out of housing affordability, housing experts say.

Still, U.S. housing remains 4% undervalued when compared with other economic fundamentals, such as consumer incomes and the cost to rent, says Jed Kolko, Trulia economist. At their 2006 peak, home prices were 39% overvalued based on the same metrics, Kolko says.

•Existing home sales. They’ve started to slow. In November, they were down year over year for the first time in 29 months, National Association of Realtor data show.

The dip was driven by higher interest rates and a tight supply of homes for sale. It doesn’t mean the housing recovery has come off the rails, because home prices and housing starts continue to improve, says Capital Economics economist Paul Ashworth.

Existing home sales, which came in at a 4.9 million seasonally adjusted pace in November, are expected to be about 10% higher in 2013 than 2012 and stay about the same at 5.1 million in 2014, NAR forecasts. That’s roughly back to 2007 levels but below the inflated levels preceding the housing crash.

New-home sales, which make up a smaller part of the market, have more room to grow. They hit an annual pace of 464,000 in November, up almost 17% from a year ago but still below the 700,000-a-year pace generally considered healthy.

The new year will be different for home buyers, though.

Look for fewer bidding wars and a less frantic market, says Glenn Kelman, CEO of brokerage Redfin. Its data show bidding wars recently falling to one of two offers handled by Redfin agents, down from three of four at the peak in March.

Homes are taking longer to sell, and more sellers are also reducing prices to win sales, Kelman says. At the same time, the supply of existing homes for sale edged up to 5.1 months from 4.9 months in October, NAR says.  That’s still below the six-month supply that Realtors generally consider to be a balanced market for buyers and sellers.

Supply should get closer to that level in 2014, Kelman says.

Donaee and Jeff Reeve hope he’s right. The couple sold their Seattle-area home in just 10 days amid a hot June market. They’ve been renting as they search for a new home with a few acres. Meanwhile, prices have risen. The lack of suitable homes for sale is “discouraging,” says Donaee Reeve, 36, a dental hygienist.

• Housing construction. This part of the housing recovery has been a laggard.

November’s data showed an improvement, with housing starts topping 1 million on an annual basis, the Commerce Department says. That was up almost 30% from a year earlier, but it’s still far below the norm. Starts averaged 1.5 million a year before the mid-2000s housing boom.

Construction won’t return to normal this year, but it will strengthen enough to be the main driver of the housing recovery as home price gains shrink, says investment manager Goldman Sachs Asset Management.

It sees housing starts increasing 20% a year for the next several years as household formation picks up with the strengthening economy.

More home construction means more jobs for construction workers, plumbers, civil engineers and others in the building trades, as well as related industries such as furniture manufacturing, it says.

Construction alone will add 300,000 to 500,000 jobs a year to the nation’s job base for the next three years, GSAM predicts. That’s up from about 100,000 in 2013.

“The construction revival is primarily a matter of when, not if,” says Tom Teles, GSAM head of securitized and government investments.

• Mortgage rates. Sarah and Andrew Katz know home prices are going up, and mortgage interest rates, too. But they’re still convinced it’s a good time to buy a first home. They’ve set their sights on spring.

“We’re banking on interest rates staying under 5%, but they are what they are,” says Sarah, 29, who works in public relations in Manhattan.

The couple better not wait too long, economists warn.

Average rates for a fixed 30-year mortgage will rise to 5.5% by the end of 2014, says Lawrence Yun, NAR chief economist. Rates have already risen about 1 percentage point in the past year as the economy has strengthened. They’ll be pushed up further as the Federal Reserve winds down its $85 billion monthly bond-buying program.

Each percentage point increase in mortgage rates makes homes about 10% more expensive in terms of higher housing payments.

Another factor could weigh on borrowers. Starting in January, lenders must make home loans that meet new federal qualified mortgage standards or face greater liability from borrower lawsuits, should the loans go sour.

At least 5% of mortgages extended in 2013 wouldn’t meet the new standard, Yun says. More than that will likely face additional scrutiny from lenders as they implement all parts of the new rule, says Brian Koss, executive vice president of lender Mortgage Network.

He says the higher rates and tighter rules will likely drive some home buyers out of the market or into lower-priced homes than they could have afforded last year.

“People have gotten spoiled,” Koss says. Higher rates and home prices will test the strength of the housing recovery in 2014, he says.

By Julie Schmit
Source: http://www.usatoday.com/story/money/business/2014/01/01/home-prices-2014-housing-starts/4181021/#!