If you’ve been monitoring the housing market at all, you’ve probably noticed inventory flying off the shelves at what seems like a record rate. According to Zillow (onlineReal Estate Network), home sales in Fort Thomas for April 2012 were 26. For April 2013, 21 homes were sold. Comparing May 2012 to May 2013, we see 29 versus 31. So, perception may not always be completely rooted in fact. That said, I can tell you from personal experience, having just sold my first home and bought a second, for those in the “hunt”, houses more often than not seemed to go “pending” the day they were placed on the market. Therefore, while actual sales may not be up significantly, month-over-month, the speed with which many desirable homes are coming off the market is significant.
To provide FTM with more insight on the housing market, David Schneider of Re/Max Affiliates and Ken Bowman of Huff Realty (full disclosure, both advertise with FTM), gave us some answers to a few questions. Schneider has been in real estate since 1984 and Bowman for the past nine years. Their responses are below:
How would you describe the housing market we are in right now?
Schneider: I would describe the market as being robust at this time. Buyers and sellers are going about their business of moving to the home they want. I think that is the key statement here. In the changing economic environment people now give a lot of thought to exactly what their wants and needs are. If they are feeling the stress of an income loss they are getting themselves repositioned to live more comfortably. That may mean moving from a 4000 square foot home to a 1500 to 2000 square foot home. In terms of planning and success there are those who are still making the move up to a larger home for their growing families. The market prices are still not where they were prior to 2008. Buyers and sellers have been willing to make sacrifices to get what they want.
Bowman: Usually one could say buyers’ or sellers’ market, but right now in many ways, it's good for both. Inventory is low, so that is an advantage for sellers. Prices have slowly started to climb, but at a more realistic pace, which should give buyers confidence. Interest rates that were predicted to climb more drastically, have stabilized in mid 4's, which is still pretty attractive when we look at history.
How does this current market stack up to previous ones you have seen?
Schneider: The past five years have been really tough as all agents can attest. Prices tanked, the public had a bad taste in their mouth as the recession rolled through this area. It got to a point that buyers would look at a property and wait a month or two for a price reduction before even presenting an offer. Today, the prices are not pre-recession but if the seller has a great home and it is priced correctly it is not uncommon to get multiple offers in the first weeks on the market. There are two things necessary for sellers to be aware of today: 1) Your home needs to win the "beauty contest" and 2) You have to win the "price war". Buyers are more aware and have all the information they need on the internet to make a sound buying decision. A sellers home can be looked at from an aerial view using GIS to their financial history of public tax records in a matter of minutes.
Bowman: When I started, it was a giant party for agents due to inflated prices, crazy easy financing with little pre-qualification etc. It was way too easy for buyers to get in over their heads. A fun time for agents, sellers & buyers that could not last. I would describe this market as more reality based, but good for buyers.
What impact if any do you think we will see with the recent rise in interest rates?
Schneider: The interest rates will lightly touch the brakes of the housing industry. The lower income buyers will be most affected as .25 percent can make a difference of getting loan approval. The seasoned, higher salary buyers will shrug it off and tighten their financial belts to get what they want.
Bowman: I think that recent news from the fed eased fears on a continuing rise in rates that we started to see. They have gone up slightly, but are still attractive. We are not expected to ever see the historic lows of the past few months again. I am still in shock that I found and locked in at 2.625 (on a 15 yr.) a few months ago for myself. We won't see that again, but mid 4's on a 30 yr. are still attractive.
What would you say to someone who is considering selling right now or a prospective buyer?
Schneider: This is America. As Americans we are always pursuing our dreams and we will continue to pursue them no matter what the interest rates are. The recession, interest rates, taxes are simply bumps in the road. Make the adjustment you need to make for your family and continue to enjoy the greatest country in the world. I have helped many families move up and move down in this crazy market. Some have broken even financially. Most have taken a financial loss in their present properties to get to the one they really, really want. I started my career in 1984. At that time the interest rates were around 12% fixed. Shortly after I started there was a great financial product that became popular. The ARM (Adjustable Rate Mortgage) was the hottest financing around! A buyer could get three years at 9.875 % interest rate for the first three years of their thirty year loan. Of course we all thought it was great. There have been a lot of small recessions in the past 25 years. From 2008 until 2011 was the worst I have seen. We are all excited to get those days behind us. The American dream is still alive and well.
Bowman: Get off the fence. The time is good for both sellers and buyers. Be patient. Inventory is low, but changing week by week. When you find it, do some homework and get the offer in ASAP to avoid disappointment. A buyers’ agent can be very helpful and can set up auto notification for you so that as soon as homes go onto the market that fit your criteria, you are notified by e-mail of the listing details. This costs you nothing, as the seller's side pays so it makes no sense not to have an agent working for you.
There you have it. To summarize the thoughts of the two experienced real estate agents: Get off the fence and live the American dream! Feel free to leave your thoughts on the real estate market, the Fort Thomas inventory shortage, or your home buying or selling experience in the comments below.