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What the Housing Market Could Look Like in 2023
The housing market has been a hot topic over the past year, with many people wondering what the future holds. Now, it is important to note that it is difficult to predict with certainty what will happen to house prices in 2023. The housing market is influenced by a variety of factors, including economic conditions, interest rates, and the availability of homes for sale. While it's always difficult to make predictions, there are a few key trends that experts are watching as we head into the new year. Here's a look at what we might expect to see in the housing market throughout 2023: Continued demand for homes The pandemic has had a big impact on the way people think about their living situations, with many people looking for more space or seeking out homes in the suburbs or rural areas. This trend is expected to continue in 2023, with strong demand for both new and existing homes. Limited inventory One potential challenge for homebuyers in 2023 could be a limited supply of homes on the market. The pandemic has disrupted construction and there are already reports of shortages of materials like lumber and concrete, which could lead to fewer new homes being built. Additionally, many homeowners who were hesitant to sell during the pandemic may now be more willing to put their homes on the market, which could lead to increased competition for available homes. Rising prices Given the strong demand for homes and limited supply, it's likely that home prices will continue to rise in 2023. This could make it more difficult for some buyers to afford a home, particularly if they are trying to enter a market that has already seen significant price appreciation. Increased demand for rental properties While the pandemic has led to a surge in demand for single-family homes, it has also increased the demand for rental properties. Many people have been forced to move or change their living situations due to the pandemic, and the flexibility and security of renting may be more appealing to some in the current economic climate. This trend is expected to continue in 2023, with demand for rental properties remaining strong. Greater use of technology in the homebuying process The pandemic has accelerated the use of technology in the real estate industry, with virtual tours and online transactions becoming more common. This trend is expected to continue in 2023, with technology playing an increasingly important role in the homebuying process. This could make it easier for buyers to find and purchase a home, even if they are not able to physically visit the property. Greater focus on sustainability and energy efficiency The housing market has long been a major contributor to energy consumption and carbon emissions, but there is growing interest in making homes more sustainable and energy efficient. This trend is expected to continue in 2023, with buyers increasingly looking for homes that are built with energy-efficient materials and appliances, and that have features like solar panels or green roofs. As a result, builders and developers may focus more on constructing homes that meet these standards. Looking forward Overall, the housing market is expected to remain strong in 2023, with low interest rates and continued demand driving the market. However, limited inventory and rising prices could present challenges for some homebuyers. It is important to note that the housing market can vary significantly depending on the location, and what is happening in one market may not be reflective of what is happening in others. If you are considering buying or selling a home in 2023, it is a good idea to consult with a real estate professional and do your own research to get a sense of what is happening in your local market. To view the original article, visit the Transactly blog.
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In a Slumping Market, These Buyers Could Find Advantages
It's a precarious time for house hunting. Prices are high and show no signs of lowering, as housing affordability hit a 37-year record low this year. Moreover, mortgage rates have soared this year, climbing to more than 7% – the highest in 10 years. That said, for some buyers, the market is friendlier than it was months ago. Despite inflation, skyrocketing interest rates, and the threat of an impending recession, some homebuyers could benefit from the current state of the market. So, what types of buyers could find this market more accessible to purchasing a home? The Housing Market is Best for Middle-Class Buyers Having money is the easiest way to buy a home, but the housing market is currently less attractive for high-income buyers. Many people flush with cash are discouraged from shopping for homes due to having their equity tied up in plunging stocks and bonds. Lower-income homebuyers face even steeper challenges, as high prices and increasing interest rates price them out of the market entirely. If your buyers are either high- or low-income, they might want to wait for a shift in the market before closing a deal. Those who straddle the fence financially are in the best position to invest in a new home. A middle-class buyer with a moderate income is less likely to have significant cash invested in the stock market. They're also traditionally more willing to take on higher interest rates, as middle-class buyers have for years taken out adjustable-rate mortgages (ARMs). Buyers Who Can Offer Cold Hard Cash Are Most Competitive Most homebuyers have little choice but to take out a loan to purchase a house. However, for those with liquid assets, sellers highly favor cash payments over loans. Currently, about 20% of buyers already pay in full with cash or make a significant cash down payment. With few exceptions, paying cash will save homebuyers money in the long run. For instance, cash payment eliminates mortgage payments and interest and can reduce closing costs. Buyers also walk away with an extra six figures over time. For example, a $300,000 loan with a 7.25% interest rate would add up to over $400,000 interest paid over the course of a standard 30-year fixed rate. Additionally, sellers appreciate cash payments and often choose them over other payment types. As a result, some sellers are inclined to slash their asking prices for a cash offer. With bidding wars less common than last year, cash payments are attractive to sellers because they generally result in quicker, smoother transactions that get homes off the market. Renters May Still Save Long Term if They Become Buyers Home prices are sky-high, but so is the average monthly cost of renting a house, apartment, or condo. Therefore, some of your current renters and prospective buyers may be willing to stomach higher mortgage rates and pricier homes. Depending on the location, buying a house may be more economical than renting. Buyers who have cash or qualify for a loan could save money over time by trading their lease for a mortgage. After all, rental costs for single-family homes have reached a national average of $2,495 a month – a 13.4% increase compared to 2021. While there was a decline in average rental prices during the height of the COVID-19 pandemic, rental prices have risen 17.8% over the past year. Additionally, rental prices have rocketed up 25% higher than pre-pandemic levels. Experts predict that rental prices will continue to surge in 2023, further incentivizing homeownership. Market trends have shown that, for most people, now is a difficult time to buy a house. For some of your buyers, however, this may be the time to enter a cooling housing market and find the right home. To view the original article, visit the Homesnap blog.
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[Best of 2022] Is a Recession About to Rock the Housing Market?
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What Are 2023's Top Housing Markets?
With affordability on home buyers' minds as interest rates continue to increase and outsized price tags have become the pandemic-born norm, Realtor.com offers hope – and helpful information – for buyers with its 2023 Top Housing Markets forecast. These markets are not only poised to see the strongest combined growth in home sales and listing prices in the coming year, but up to this point they have seen lower price increases, a relatively smaller affordability crunch than other markets across the U.S. Mainly concentrated in mid-size markets east of the Mississippi, with local industries tied to manufacturing, education, healthcare and government, this year's top 10, in rank order, are Hartford-West Hartford, Conn., El Paso, Texas, Louisville, Ky., Worcester, Mass., Buffalo-Cheektowaga N.Y., Augusta-Richmond County, Ga., Grand Rapids-Wyoming, Mich., Columbia, S.C., Chattanooga, Tenn., and Toledo, Ohio. (See below for the full ranking of the 100 largest U.S. markets.) Home sales across the top 10 markets are forecasted to grow by 5.2% year-over-year in 2022, whereas the national homes sale projection is for declining sales (-14.1%). Additionally, average home prices in the top 10 are expected to increase 7.3% – compared to 5.4% for the U.S. as a whole. At a time when housing costs are a concern for many, these areas offer relative affordability, having experienced less of a price surge than other extremely hot, pandemic-era markets. They also have a greater share of homeowners who own their homes outright, without a mortgage, giving more residents equity to build on. In the top 10 markets, about 23% of housing inventory is affordable at the median income level, compared to just 17% of affordable homes nationally. Better affordability offers some insulation from the impact of rising mortgage rates. "As many households keep a close watch on their spending, we expect these top housing markets to be in relatively high demand," says Realtor.com® Chief Economist Danielle Hale. "We've seen lower price increases, more general affordability and more use of government-backed mortgage products for veterans, first-time and minority buyers in these top markets, providing opportunities for all home buyers to stretch their homebuying dollars. Many of these areas flew under the radar in the pandemic frenzy, and are now well-positioned to bubble up with solid job prospects without the big-city price tag. Top Markets Sidestepped Steep Prices of 2022 This year's top 10 housing markets didn't get as caught up in the wild buying frenzy – and price increases – of 2022 as other areas. Sale prices in the 12 months ending August 2022 increased by 10.5% on a year-over-year basis, compared to a growth rate of 12.6% for all 100 largest metros. The top markets have also seen less of a dip in sales in recent months, with sales declining by 9.1% year-over-year, compared to an average decline of 12.3% for all 100 metro areas. "Made in America" Mid-Sized Metros Poised to Bubble Up Representing a shift from remote-work and tech-industry influenced home buying, this year's top markets have a renewed focus on domestic industry and trade. The pandemic exposed an achilles heel of the far-flung supply chains that had become the norm, namely, that logistics can be disrupted by a wide array of events. This has renewed corporate, government, and consumer focus in these markets where "Made in America" happens.On average, these mid-sized metros employ a higher proportion of workers in manufacturing, government, education and healthcare jobs relative to the 100 largest US metros, while jobs in tech, professional services, information technology and leisure/hospitality are less common in these areas. Having largely avoided the pandemic housing boom that we saw in other markets, home buyers in the top markets can find solid job prospects and affordable housing options. Attractive to Out-Of-Town Buyers Almost half of the buyers looking at the top 10 markets are from areas outside those states. For example, in Hartford, Conn., with a median price of $375,000 in October 2022, homebuyers from New York, Boston and Washington, DC, were leading the wave of out-of-state views in the third quarter of 2022, finding a significant value proposition compared not only to the high price of houses in New York City ($670,000), but also the national median ($425,000). With remote work opportunities still robust, and affordability top of mind, these markets will continue to draw buyers from out of state. Buyers Take Advantage of Government-Backed Loans Home sales in the top 10 metros also tend to leverage more government-backed mortgage products such as VA loans and FHA loans. Between Jan.-Aug. 2022, the share of mortgaged-sales with a VA loan was 9.4% in the top 10 markets vs. 7.5% among all the 100 markets reviewed. These types of loans help buyers safely enter the market with lower down payments and often slightly lower mortgage rates. Realtor.com® 2023 Top Housing Markets 1. Hartford-West Hartford et al, Conn. November 2022 median home price: $372,000Forecasted 2023 home sales change: +6.5%Forecasted 2023 home price change: +8.5%Forecasted 2023 combined sales and price change: +15.0% 2. El Paso, Texas November 2022 median home price: $291,000Forecasted 2023 home sales change: +8.9%Forecasted 2023 home price change: +5.4%Forecasted 2023 combined sales and price change: +14.3% 3. Louisville et al, Ky-Ind. November 2022 median home price: $290,000Forecasted 2023 home sales change: +5.2%Forecasted 2023 home price change: +8.4%Forecasted 2023 combined sales and price change: +13.6% 4. Worcester, Mass.-Conn. November 2022 median home price: $447,000Forecasted 2023 home sales change: +2.5%Forecasted 2023 home price change: +10.6%Forecasted 2023 combined sales and price change: +13.1% 5. Buffalo-Cheektowaga et al, N.Y. November 2022 median home price: $240,000Forecasted 2023 home sales change: +6.3%Forecasted 2023 home price change: +6.0%Forecasted 2023 combined sales and price change: +12.3% 6. Augusta-Richmond County, Ga.-S.C. November 2022 median home price: $319,000Forecasted 2023 home sales change: +6.2%Forecasted 2023 home price change: +5.7%Forecasted 2023 combined sales and price change: +11.9% 7. Grand Rapids-Wy., Mich. November 2022 median home price: $358,000Forecasted 2023 home sales change: +1.6%Forecasted 2023 home price change: +10.0%Forecasted 2023 combined sales and price change: +11.6% 8. Columbia, S.C. November 2022 median home price: $300,000Forecasted 2023 home sales change: +7.7%Forecasted 2023 home price change: +3.6%Forecasted 2023 combined sales and price change: +11.3% 9. Chattanooga, Tenn.-Ga. November 2022 median home price: $397,000Forecasted 2023 home sales change: +2.9%Forecasted 2023 home price change: +8.2%Forecasted 2023 combined sales and price change: +11.1% 10. Toledo, Ohio November 2022 median home price: $161,000Forecasted 2023 home sales change: +4.2%Forecasted 2023 home price change: +6.7%Forecasted 2023 combined sales and price change: +10.9% Realtor.com® 2023 Housing Forecast – 100 Largest U.S. Metros (Ranked)
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Forget Black Friday: Thursdays are the day for home price cuts
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5 Reasons Why the Sky Is Not Falling: By the Numbers
The spike in home sales during the middle of the pandemic took nearly everyone by surprise. Previous housing predictions had been dire. The March 19, 2020, headline from CNBC recapped the initial universal sentiment among industry experts: "Home sales could fall 35%, as coronavirus stalls spring housing market, new analysis says." Money magazine reported on April 30, 2020, "Four out of five agents surveyed in early April by the National Association of Realtors said they saw fewer houses on the market. Only half of Americans said they think that now is a good time to buy a home, according to a recent Gallup survey — the lowest share since Gallup began tracking people's sentiments on real estate in 1978." With hindsight, we know the exact opposite happened: We saw record home sales and homes flying off the shelves at an unprecedented speed. It shouldn't be surprising for anyone who has been in real estate for more than a decade that we're hearing the same doom and gloom forecasts today. This time, the catalyst is not a virus, but an unprecedented rise in mortgage rates. Current headlines forecast more bad news for housing: CBS News reports, "U.S. home prices could fall as much as 20% next year," with the New York Times adding, "The Housing Market Is Worse Than You Think." One of the most recent negative headlines buries the news for doom and gloom, leading with: "More than $1 trillion in equity shed during third quarter." The same story notes that "tappable equity at the end of September was at $10.5 trillion," and that "home prices remain up 45% from the start of the COVID-19 crisis. Median home prices are still at least 19% above their February 2020 levels in every major market in the country." It is the headlines that are causing an overreaction among many real estate agents, resulting frequently in panic. The good news is that 2023 is not 2008. The numbers prove the difference. So, let's stop talking about single-source predictions and economic forecasts and instead focus on what the data tells us about today's real estate market compared to 2008. 1. Massive versus little equity: In 2008, "homes were underwater." That was the dominant buzz phrase to describe the chaos that followed when the financial markets collapsed. But the rapid rise in home values during the pandemic has created a completely different real estate market in 2023. Homeowner equity keeps growing, even today despite recent market turndown, reports real estate data guru ATTOM. Only one in 35 homes are seriously underwater. In 2008, nearly one in five homeowners were underwater, CNN Money said on October 31, 2008. 2. Highest FICO scores ever: Between 2004 and 2013, which included the mortgage crisis, average credit scores were at their lowest recorded level at 686. From 2018 to 2020, the average rose to 710, a record high according to a report from credit firm Experian. Others find the average score is even higher, hitting a record high of 788 in the first quarter of 2022, the Federal Reserve Bank of New York reported. Between 2001 and 2009, nearly a third of all home loans were made with a FICO score below 660. Today, few new mortgage loans are made for borrowers with credit scores below 670. What drove the last housing crisis to the brink was the wide availability of no-doc and subprime mortgage loans (below 600 FICO scores). We know that lower FICO scores resulted in more loans that were seriously delinquent in 2005 through 2007. Subprime loans today are but a small fraction of mortgages originated: just 3 percent, according to the N.Y. Fed, versus about 1 in 8 loans from 2003 to 2007. 3. Lower foreclosure rates: In January 2009, the MarketWatch headline said, "2009 foreclosures hit a record high: No relief in sight as delinquent loans continue to pile up." That month, foreclosure filings jumped 21%, comprising 2.21% of all U.S. housing units. A stunning 2.82 million housing units, or one in 45, were in foreclosure. In September, 31,836 properties had foreclosure filings, according to ATTOM, saying they are still lagging at pre-pandemic levels. 4. Inventory shortage of homes needed for population growth: Between 2007 and 2020, homebuilders started at nearly 400,000 homes fewer than their historical average. As the No. 1 ranked real estate agent Ben Caballero expertly detailed for Inman News in May 2020, even if homebuilders can increase production to 1.5 million new homes a year, it will take at least six years to catch up. We have a major housing shortage. Supply and demand drive U.S. markets, including real estate. Keep in mind that the U.S. population in 1980 was 226.5 million people. Today, we have 100 million more people: the population is 331.9 million. While we will see many markets have more home inventory coming online, we have a systemic national shortage and will continue to need more homes. 5. 4 million to 5 million homes are sold each year, regardless of interest rates: From 1998 until 2022, over 4 million homes have been sold annually. When interest rates were below 3%, more than 6 million existing homes were sold. But when interest rates were close to 6% in 2005, 7.1 million existing home sales were made. Interest rates are not the only driver in a home-selling decision. If they were, home sales would completely collapse when interest rates are higher. But they don't — because life happens. People marry, have children, kids move out, divorces happen, families relocate to retire, careerists move for a new job, family members die, Americans want a bigger or smaller home, to move closer to family — those are just some of the reasons driving home selling decisions. Also, remember the adage that you "marry the home but date the rate." This is as true today as in October of 1981, when mortgage rates exceeded 18%. Rates go up, and they also come down. People refinance. How many people do you know have had the same home mortgage for 30 years? No one can predict interest rates — but historically, we know they do not remain high forever. 2023 is not 2008 As you can see, the sky is not falling. But will the housing market experience a correction? Yes. Prices cannot go up forever without wages keeping pace: History shows us that. But will we have a collapse in pricing? The data says, "no." 2023 is a year with homeowners having more home equity because of the run-up in home values. FICO scores will remain high, and the activity in subprime loans and foreclosures remain far below anything like we saw in 2008. While we will likely see more inventory in many markets, it won't be enough to fix our housing shortage problem. Life happens regardless of the news. People will still move whatever interest rates are doing. Of course, some may pause — just like people paused when the pandemic first struck — but history shows buyers adjust and come back into the market. Jessica Morrow, a founding team member at Revive, is the Chief of Staff and oversees company-wide operations. A real estate industry leader, Jessica's background includes real estate brokerage management and ground-up construction. Learn more about Jessica and Revive at revive.realestate.com.
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Consumers Think Home Prices Will Decline. Are They Correct?
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Hear Wedding Bells? How the Marriage Boom Could Affect Your Real Estate Business
2022 has been the year of the wedding. Estimates put the total number of this year's wedding celebrations at more than 2.5 million, which dwarfs the COVID-scarred years of 2020 and 2021, and represents a roughly 30% increase from before the pandemic. A glut of couples streaming to the altar is no surprise after the disruptions of the past few years. But what may be a surprise is that the wedding boom can affect more than your social calendar. A surge in weddings can have real, noticeable effects on the real estate market and on your business. 1. Marriage Boom May Boost Buyer Demand Determining the state of homebuyer demand often comes down to asking consumers two questions: Do you want to buy a home? Can you afford to buy a home? When a couple gets married, the odds of answering yes to these questions increases for both parties. In terms of desire, newlyweds buying a home is as American a tradition as road trips, Black Friday, and refusing to adopt the metric system. Everyone is different, but in general, getting married increases people's desire to buy a home. Affordability is where things get trickier. After all, mortgage rates have skyrocketed this year, and much has been made of the dearth of "starter homes" available to young couples who once flocked to them. Still, getting married does generally increase consumers' ability to buy a home. Two incomes are better than one, and help prospective buyers qualify for higher home loans. Plus, couples are more commonly asking their wedding guests for cash rather than registry gifts in order to fund a down payment. Some couples report raising tens of thousands of dollars. If you notice more buyers seeking out your services this year and into 2023, you may find yourself working with newly married couples. 2. Marriage Boom Could Push Sellers to the Market In addition to boosting buyer demand, the marriage boom may also push more sellers into the market. Keep in mind that some newlywed couples already own a home. In fact, the number of unmarried adults living with a partner has doubled in the past 20 years. And in different life stages and circumstances, marriage can spur desire for a new home. Consider three hypothetical seller stories: A young, newly-married couple with no children already owns a small home. They want more space to start a family and plan to put their current home on the market. A middle-aged, newly-married couple each have children from a previous marriage. They're merging their families and want to start fresh in a new home. They also need to sell each of their existing homes. Two senior citizens get married after the deaths of their first spouses. Their children are grown and homes are too big. They want to put both homes on the market, and downsize to a townhouse or condo. Agents often hear that if a client needs to sell, they also need to buy. That idiom also works in reverse. For many newlyweds, wanting to buy means needing to sell, and the rising number of homes on the market indicates that the marriage boom, among other factors, may be pushing some sellers to list their homes. 3. Marriage Boom Makes Real Estate Agents In-Demand The final way the marriage boom could affect your business as a real estate agent is simple: It may make your services and know-how more in-demand. Getting married and adjusting to life as newlyweds is stressful enough. Especially in a time of rising mortgage rates, freshly-married buyers and sellers may be more inclined to turn to an expert for help. Adjustable-rate mortgages (ARMs), mortgage discount points, the threat of a recession – you're the professional who is qualified to help prospective buyers and sellers get a sense of the market and their options. When it's time to buy or sell, you help make the transaction happen. And when marriages surge, as they are right now, more newlyweds need your counsel and help accomplishing their real estate goals. To view the original article, visit the Homesnap blog.
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Is the Housing Market in a Recession or Correction?
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[Podcast] Decoding Real Estate: Deliver Clarity to Clients Amongst Shifting Market Concerns
What's everyone in real estate talking about these days? The shifting market and how it will affect inventory, sales and consumer confidence. This month's Decoding Real Estate is talking about it too, but we've got a much more positive spin than the doom and gloom media narrative. That's because RPR (Realtors Property Resource®) has recently introduced new charts and graphs that can help REALTORS® deliver local market stats to their clients and prospects. Hyperlocal data can ease fears and cut through the confusion. And there's no better expert on the subject than DRE's own host, Reggie Nicolay. Listen in as Genie Willett asks Reggie to explain what the new housing Market Trends charts and graphs contain, including definitions of the type of market areas are in, months supply of inventory, days on market, median prices, and much more. Reggie also offers up a slew of tips on how agents can use, share and promote these crucial stats, and he lists a handful of other impactful ways agents can promote their business (using free RPR tools and data!). Plus, a sneak preview of RPR's next big product release. Decoding Real Estate is hosted by Reggie Nicolay and Genie Willett. Subscribe/Follow Click here for a complete transcript of the episode. And be sure to check out these helpful and relevant links: RPR Unveils New Charts and Graphs in its Neighborhood Pages Shifting Real Estate Market: How to Create a Video That Clears up Confusion Free Templates to Help you Create Social Media Market Updates Printable guide: How's the Market? How to Build Your Neighborhood Database from Scratch Realtors Property Resource® Listen on: Apple Podcasts Google Podcasts Spotify Stitcher To view the original article, visit the RPR blog.
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3 Must-Know Trends About the Housing Market
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How School Ratings Can Affect Home Values and Prices
New buyers tend to approach the house hunting process with a lengthy list of demands to suit their many needs. Those with kids, along with those planning on having them in the future, prioritize clean, safe neighborhoods that are suitable for raising a family. This fraction of buyers will likely take schooling options into account, as well, when preparing to move into a new community. Education drives many buyers' financial decisions, and thus has an enormous impact on the residential real estate market. Properties in ideal locations (i.e., within walking or short driving distance to good schools) often see price spikes in order to offset high demand, which can be unfavorable for low- and middle-income families, but beneficial for a school district's local economy. In other words, increased home values have their positives and negatives. Let's break down why: Education as a Factor in the Search for Homes According to the National Association of Realtors' 2022 Home Buyers and Sellers Generational Trends Report, roughly 31% of surveyed home buyers across all generations over the past year moved with at least one child under the age of 18. Comparably, 23% of surveyed buyers spanning all generations selected school district quality as a factor that influenced their choice in neighborhoods. About 20% of buyers selected convenience to schools as an influencing factor. Naturally, buyers with younger children will take education into account when searching for new homes. So, in response, sellers also consider education when pricing their homes and putting them on the market. However, buyers with no kids also take advantage of highly ranked school districts because they intend to start families in the future or simply want to benefit from the community-wide privileges that good educational programs have to offer. Studies have theorized that more competitive and well-funded options for K-12 education have a more positive effect on the communities that surround them. One particular study by RAND Education claimed that higher-quality school districts impact both local and larger communities in many positive ways: they can lead to lower crime rates, increased property taxes, and increased civic participation, which can be proven by election turnout, participation in cultural events, and improved news literacy. Proximity to Good Schools Is a Plus Since parents typically want to send their kids to high-quality schools, buyers with children tend to focus on properties within good school districts that also have relatively short walking or driving commutes. So, what characteristics define a "good" school? Such schools are usually academically rigorous, maintain high attendance and graduation rates, generate high standardized test scores, offer low student-teacher ratios, and provide an onslaught of extracurricular activities for students to get involved in after class. GreatSchools, a nonprofit organization that rates and reviews pre-K to 12 schools using data from the Office of Civil Rights, also takes equity into account when analyzing learning environments for both students and teachers. GreatSchools values racial and socioeconomic diversity in student bodies, scoring more diverse and inclusive schools higher than schools leaning more homogenous. GreatSchools also considers teacher experience, student progress, and the variety of classes and programs offered, usually as electives. Lower-Income Families Tend to Be Priced Out of Strong School Districts Because the demand for housing is so strong in neighborhoods with competitive school districts, home prices and values in these areas can skyrocket, pricing out families with low, or even average, household incomes. The RAND study also states that the quality of a school district is "positively associated" with increased housing values, as parents are willing to pay more money to ensure their kids receive better education. This exclusion of poorer families furthers the divide between socioeconomic classes, creating a correlation between class and educational attainment. Affordable homes tend to fall within school districts with lower standardized test scores, fewer extracurricular activity options for students, and less funding from outside sources, including local government. The communities surrounding these homes also tend to lack economic stability, or even grow financially decrepit, due to the underperforming school districts that serve them. Competitive schools tend to attract wealthy residents who are capable of investing more money into their children's education, which, in turn, leads to flourishing local economies that further benefit these schools. And, by challenging their student bodies academically, these schools prepare their youth (and their communities) for economic success, equipping them with the skills they need to succeed in college and the workforce in the future. As the academic achievement and wealth gaps widen to new extremes, school ratings are becoming an increasingly important factor in home buyers' search criteria. To view the original article, visit the Homes.com blog.
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Consumers' Housing Sentiment Is Plunging. Is the Real Estate Market Imploding?
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Use RPR for A+ School Reports and Data
It's August, and that means "Back to School" time. A time for your clients to work on clothes, supplies, carpools and schedules for the coming year. And time for you to take a refresher course on RPR School reports and data! RPR school reports and data Schools play an important role in the home buying process. However, it's not just parents of school-aged children that benefit from good schools. Home values benefit, too. Deciding to buy a home in a good school district can certainly help increase your clients' home value over time. And if the market shifts or "corrects" in the future, an outstanding school district could make all the difference during a changing market. Let's take a look at RPR school data, how you can search for homes in specific school districts with RPR, and how you can create reports that will guide your buyers to better informed decisions. RPR school data–you could say it's a Niche market RPR's school data is robust and extensive. It's provided by a collaboration with Niche, the industry's fastest-growing school data provider. Niche specializes in connecting schools with students and families. It has in-depth profiles on every school and college in America, including over 140 million reviews and ratings. With RPR, you can access this data which includes teacher, academic, and overall school grades; as well as school district side-by-side comparisons. Specific metrics include: Total enrollment Students per teacher Average GPA Math and reading proficiency Percentage of gifted students Number of students enrolled in AP Graduation rate Average ACT and SAT scores Average teacher salary Percentage of teachers in the first or second year Written school reviews RPR school searches When a buyer client wants to be in a specific school district, you can use RPR maps to search for properties near schools or within district boundaries. REALTORS® can search for schools within 5 miles of a location; by city/state, school, or district name; and even by type of school (elementary, middle or high school). Here's how: Log in to narrpr.com Click Research and then select School Search. The school search will appear. From the left drop down menu, choose whether to search by Geography or within a particular School District. Enter the city and state or zip, and click the magnifying glass to execute your search To further narrow down your search, enter a School Name to the right of the School Search or choose a School Type: Elementary, Middle, High Search results extra credit From the Search Results, view the basic information and rating of each school, create a School Report, or View Nearby Listings. If you're looking to dive deeper on a school, select the School name. You'll see the school's address, grades served, enrollment, information about standardized test scores and the school's grade rating, including the average rating for schools in the area. The Reviews tab displays community reviews for the school. These reviews are also provided by Niche. You can also link to nearby listings, neighborhood information, and other local schools RPR School Report cards The final step to helping your buyer clients in their school search is creating and delivering RPR School Reports. Much like our Property Reports, they contain tons of data in a sharp-looking layout that you can easily send to clients electronically or you can print them out and bind them for in person delivery. An RPR School Report summarizes the data from your search, and provides options to compare schools within a district or a specified radius, and/or select up to 20 nearby listings to include in the report. From the school results page, click Create Report (or choose Schools from the Reports menu). Select to choose the elements you want displayed on the report Personalize your report with a recipient name and message Choose your delivery method Click Run Report School zone ahead Schools play an important role in home searches, whether the buyers have children or not. As a REALTOR®, you can tap into RPR data to search, compare and find the right schools in the right neighborhoods. Use these tools to find homes in or near coveted school districts, which helps kids get a solid education, and certainly doesn't hurt home values. To view the original article, visit the RPR blog.
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Shifting Real Estate Market: How to Create a Video That Clears up Confusion
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This One Trend Indicates the Housing Market is Finally Returning to Normal
For more than two years, agents, buyers and sellers have been waiting for the housing market to return to normal. There's one major indication it's finally happening: More homes on the market are getting a price cut. In June 2022, 1 in 7 homes on the market had their prices lowered. That's nearly twice the frequency of June 2021, when only 1 in 13 homes lowered their initial listing price. What's causing sellers to slash the price of on-market homes? And what other signs should you be looking for when evaluating the state of your local real estate market? Why Are Sellers Cutting On-Market Home Prices? In short, price cuts are returning to the housing market because fewer buyers are competing for homes. The biggest reason? Rising interest and mortgage rates. In 2020, the Federal Reserve slashed interest rates to blunt the economic effects of the COVID-19 pandemic. Those lowered interest rates resulted in rock-bottom mortgage rates, and prompted a flood of buyers to enter the market. This increased competition turbocharged the housing market. The price of homes skyrocketed; bidding wars on properties and offers over listing price became common. In 2022, the Federal Reserve has hiked interest rates. Mortgage rates have followed, rising faster than any time in the past 40 years. As the cost of borrowing increases, fewer buyers are entering the market, and many of those who do simply aren't willing to engage in all-out bidding wars. Many experts believe price cuts signal a housing market correction, not a crash. Keep in mind that from 2017 to 2019, before the disruption of the COVID pandemic, about 1 in every 4 to 5 homes had its price cut while on the market. Price cuts are normal, and likely to become more common so long as mortgage rates increase. What Are Other Signs of a Cooling Housing Market? Price cuts indicate that the housing market is returning to normal. But you should consider other vital signs when monitoring your local market, including: Mortgage applications: Before consumers can buy a house, they have to apply for a mortgage. Nationwide, the number of mortgage applications has fallen throughout 2022. Keep tabs on your region's mortgage application trends to gauge buyer demand whether the local market is cooling Number of home listings: Demand is driven by supply. In a cooling housing market, more homes are likely to be on the market. Some metro areas have more housing supply than others, but all remain affected by the limited number of new homes being built. Attendance at tours and open houses: As you host and attend home tours, ask yourself: Does turnout seem to be down? Are buyers making aggressive, cash-heavy offers? If turnout is low and buyers seem to be weighing their options, consider your local market cooling. Overall, price cuts indicate a housing market that is moving back to normal. But every metro area is different, and every buyer and seller has different expectations. Be sure you have the tools and information to help clients navigate the market, no matter what. To view the original article, visit the Homesnap blog.
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It's a Sellers Market. So Why Aren't More People Selling Their Home?
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Future Proof Your Business by Knowing Your Market and Your Numbers
Markets move, and if you read the tea leaves, changes are coming. Rising interest rates, among other things, are cooling home sales in many areas and experts believe that housing inventory will rise from its historically low levels. As a Realtor, you need to be informed of any market changes so you can deliver local market expertise that highlights the opportunities of today's real estate market. One way to do that is to keep a constant tab on your market, and the corresponding statistics and data. And RPR (Realtors Property Resource) provides that knowledge in big, heaping spoonfuls. Read on to see how RPR can help you stay up to date and in the know. Markets, trends, charts and graphs In true RPR fashion, we're constantly striving to improve your user experience. Your input, feedback and suggestions fuel our designers and developers. And it's why we keep making access to property data, and how to understand and share that data, better and better. And now we make it easier than ever to answer the question, "How's the market doing?" Case in point: the new "Summary" and "Housing" sections of the Neighborhood details pages, and the new "Market Trends" tab on any Property Details page. To see these new charts, check out our recent blog post: RPR Unveils New Charts and Graphs in its Neighborhood Pages. All of these new layouts present local market activity, sales stats and inventory details, and package them in a new, easy-on-the-eyes layout and presentation. Pro Tip: Locating the New Charts All of the new charts are on the Neighborhood pages (Summary and Housing tabs) On any Property Details Summary page, there is a new "Market Trends" tab that replaced the old "Charts" tab These updated charts are a snapshot of local market stats, including months of inventory, list to sold price, median days in RPR, and much more. You'll find this collection data, graphs and statistics incredibly helpful in explaining local market trends to your buyers and sellers. It's also an easy to understand topline that you can share with clients and prospects, which positions you as THE local market expert. For example, in the Neighborhood "Summary" section, you can save or print out the "Market Trends" charts. (To include these new charts in an RPR Report, click the "Print" button, and then under the "Destination" pull down menu, you can choose to save the file as a .pdf. Save the file (chart) and then you can attach it to other RPR reports from the Reports generation page.) This "Market Trends" chart is something home sellers and buyers will really appreciate. You can save the page to add to reports, or simply send it an email or text, or even post it as a graphic to your social media channels. Sharing this information to potential and past clients is a solid strategy to position yourself as a market expert. Send it over and then connect with prospects or clients to walk them through the key details of Months of Inventory, List to Sold Price %, Median days in RPR and Median Sold Price. It can help sellers see how the market is shifting, and help buyers prepare competitive offers. The RPR Market Activity Report When one chart won't do, you can also send complete, comprehensive reports that are packed with housing data for a particular area. The Market Activity Report showcases what is happening in the local real estate market. You can include new listings, closed sales, price changes, expired listings, open houses, and more. Market Snapshots display data for estimated home values, sale price, and list price, in the form of stats and map layers. A Market Activity Report can be generated for almost any area, including; neighborhoods, zip codes, cities, school attendance zones, and even custom areas you create and save on the map. Run it for 3 days, a week, a month, 3 months, or 6 months Choose which property statuses to display Select property types, then filter by property characteristics For a detailed how-to, check out: How to Create a Market Activity Report for any Neighborhood. "My Markets" in RPR Another smart way to keep tabs on local markets is to set up the "My Markets" area from the RPR homepage. This section is located just under the RPR "Shortcuts" icons, and is clearly labeled "My Markets." This customization feature offers you "at a glance" updates on specific neighborhoods. Just hit "ADD" or "EDIT" to get started. Now, every time you visit RPR, your chosen markets will be waiting for you. From there, you can easily track activity within the area. And while it's pretty intuitive, here's a My Markets How-To if you need more detailed instructions. Market awareness and preparedness Wherever the housing market is headed, you need to be prepared. Be open with your clients about inventory levels, days on market, and whether homes are going for above asking price. Share your insight on emerging trends and how they can use this info to their advantage. After all, they count on you to be a trusted adviser when it comes to their (most likely) largest investment. Knowing these important metrics and statistics can help you prepare for the ups and downs that are sure to come. And keeping tabs on local markets with up to date charts, stats, data and graphs from RPR is one of the best ways for you to do it. To view the original article, visit the RPR blog.
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RPR Unveils New Charts and Graphs in Its Neighborhood Pages
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A Newly Built Home Sounds Great. But Ballooning Borrowing Costs Could Crush New Home Buyers
Over time, more than half of homebuyers would prefer to buy a newly-built home over an existing home. More than 10% of U.S. home purchases are from buyers of new homes. In many ways, that's no surprise, as new homes can be specified for buyer preferences, are extra clean, energy efficient, require less maintenance, and are move-in ready at the time of purchase. But right now, the market for newly built homes has never been trickier. It's not just difficult to build or buy a new home – agreeing to an offer on a new home could be a financial risk your clients can't afford. Learn why borrowing costs are skyrocketing and what your buyers should consider when deciding whether to agree to a contract on a new home. Why Are Borrowing Costs Rising? The costs of borrowing for a home loan are surging because interest and mortgage rates are rising at their fastest clip in decades. In fact, the current average mortgage rate on a 30-year fixed-rate mortgage is 5.7%. For much of 2020 and 2021, the 30-year fixed-rate mortgage sat below 3%. Because of persistent inflation and the Federal Reserve's commitment to hiking interest rates throughout 2022, mortgage rates are primed to increase more this year. For borrowers, this is tough news. The rise in mortgage rates means hundreds of dollars more in monthly home loan payments, which can add up to tens or even hundreds of thousands more dollars spent over the course of the loan. Why Are Buyers of Newly Built Homes Vulnerable to Mortgage Rate Increases? Mortgage rate increases are difficult for all homebuyers. But buyers of newly built homes pay the heftiest financial price when mortgage rates rise. Traditionally, new home buyers sign a contract and pay a deposit several months before their home is ready. The time between signing a contract and moving into a new home has recently expanded even further – sometimes by up to a full year – due to lingering supply chain issues and building delays. Buyers of existing homes, on the other hand, typically sign a contract and pay a deposit shortly before their deal closes. This means that the risk of being burned by rising interest rates is especially acute for new home buyers. Just consider a buyer who paid a deposit on a new home last summer, with the expectation of moving in by June 2022. A year ago, that buyer's loan estimate had an interest rate under 3%. Now, mortgage rates are well above 5%, meaning that monthly mortgage payments will be hundreds of dollars higher than initially anticipated. And walking away from the deal is an unappetizing option – usually, buyers who do so sacrifice their initial deposit. How Can Buyers of New Homes Approach Rising Interest Rates? Clearly, agreeing to a contract on a newly built home involves an element of risk. But buyers – including your clients – can explore strategies that insulate them from further mortgage rate hikes and increased borrowing costs. The most common tactic to blunt the effects of rising interest rates is agreeing to a mortgage rate lock. With a mortgage rate lock, buyers lock in a specific mortgage rate, in exchange for what is usually a few hundred dollar fee. Mortgage rate locks usually come in 30, 45, or 90 day increments, but buyers can also agree to nine-month or 12-month rate locks if they agree to a price above the current 30-year fixed interest rate. For buyers of newly-built homes, a longer rate lock may make sense. Since mortgage rates are expected to be much higher in six months or a year, agreeing to a longer-term rate lock can save borrowers tens of thousands dollars over the course of a home loan. In addition, new home buyers can navigate interest rate hikes by considering an adjustable-rate mortgage (ARM), or purchasing discount points on their mortgage. An ARM offers buyers an initial five, seven, or 10-year rate that's significantly lower than a standard 30-year mortgage. In return, buyers agree to pay a much higher interest rate once this "teaser" rate expires. ARMs generally make the most sense for buyers who plan to sell their home within the span of their "teaser" period. If your clients are purchasing a newly-built starter home, or are convinced they will be able to refinance their rate in the future, an ARM may be a worthy choice. Discount points are fees a buyer pays to reduce their mortgage interest rate and monthly payment. For buyers who plan to stay in their new home for the long-term, discount points can pay off, as the price to "buy down" the interest rate is eclipsed by monthly savings on the mortgage. Overall, buyers of newly-built homes must be aware that rising interest rates and borrowing costs have the potential to blow their budget and cost them their dream home – so having a plan to deal with rising rates is a must. To view the original article, visit the Homesnap blog.
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Is a Recession About to Rock the Housing Market?
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What Does a Cooling Housing Market Feel Like?
It's the start of the traditionally zany busy season, but some agents are asking: Is the housing market cooling? Real estate agents, housing economy experts, and consumers are still facing higher-than-normal demand, but there are indications that the housing market – red-hot since 2020 – may finally be tapering. What does a cooling housing market feel like? What should you and your clients be on the lookout for when judging whether the price and demand of homes is leveling off? Every local market is unique, but wherever you are, there are four indicators about whether your housing market is cooling or remaining ultra-competitive: 1. Reduced Prices for Local Home Listings The first indication that your local housing market could be cooling is if you and your clients notice lower prices for local homes listings. Low borrowing costs meant to cushion the effects of the COVID-19 pandemic rose housing prices by 35% in the past two years. Now, with the Federal Reserve raising interest rates to fight decades-high inflation, consumers in your market may be willing to pay less for homes, driving down the price. Beyond simply lower home prices, look closely at whether a trend of reductions in price develops. If sellers are routinely marking down the price of homes already on the market, it's an indication that your market is cooling and becoming more buyer-friendly. 2. Fewer Mortgage Applications Before buyers purchase a home, they have to apply for a mortgage. So, one indicator about the housing market's competitiveness comes from the number of mortgage applications. Overall, mortgage applications dropped 8.3% in the last week of April. This decline in mortgage applications may reflect a general softening in buyer demand homes. But a lower number of mortgage applications may also derive from a limited number of homes on the market. Either way, keep an eye on the number of mortgage applications in your market. If mortgage applications are tumbling, the housing market may be tapering. If mortgage applications in your market maintain or even increase, your local market is likely still red-hot. 3. More Homes on the Market If there's one situation homebuyers and their agents are likely to have experienced in recent attempts to purchase a property, it's a paucity of homes on the market. Indeed, home listings are at a record-low, and even with rising mortgage rates and sky-high home prices, a limited inventory of available properties has kept the real estate market competitive. If you notice a wider available inventory of properties, the housing market may finally be cooling. More available homes would tamp down bidding wars and perhaps compel sellers to list their homes at lower prices. Of course, there is typically an influx of listed properties in the spring and summer – so keep a close watch on how long those listings stay on the market, and whether the price they sell for is higher or lower than the initial ask. 4. Lighter Attendance at Home Tours and Showings It's important to crunch numbers and monitor trends. But as an agent, one of the biggest advantages you possess is the ability to use your own eyes and ears to gauge the state of your local market. In particular, you should keep a close eye on attendance at local home tours and showings. Maybe you are hosting these showings yourself, or maybe you're attending with a prospective buyer – either way, pay attention to how many people are there and the questions they ask. Is turnout down significantly from where it was in February, or even last summer? Are people making aggressive, cash-heavy offers to purchase the home, or do they seem to be weighing multiple options? Use your own common sense to determine whether your market is cooling and what advice to give buyers and sellers this busy season. To view the original article, visit the Homesnap blog.
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Is Housing Inventory Finally About to Rise?
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Why Are Things So Tough for First-time Homebuyers?
A little over a decade ago, about half of homes were being sold to first-time buyers. Things have changed. Now, only 27% of sold homes are going to first-time buyers. It isn't that people aren't interested in purchasing a home – after all, demand for homes was turbocharged during the course of the COVID-19 pandemic. But first-time homebuyers are having an exceptionally hard time breaking into the market. What gives? Why are a record low proportion of properties being sold to people buying their first home? 1. High Price of Homes The first reason first-time homebuyers are having a hard time accessing the market is the sky-high price of homes. Home prices have risen nearly 20% in the past year – representing an unusual and historic surge that disadvantages first-time buyers, who are typically younger, haven't accumulated housing equity, and don't have the means to make a sizable down payment. Whether rising home prices will abate at some point this year is hotly debated, but the price of homes has been juiced by three interrelated factors: Inventory: Housing inventory remains at a record low, and continued supply chain bottlenecks leaves most experts predicting low inventory for the foreseeable future. Inflation: Inflation is at its highest rate in 40 years, increasing the price of consumer goods and services – including homes and the materials necessary to build them. Investors: Investors buy about one-third of homes in the U.S., increasing competition for available homes. Rising inflation could cause even more investors to flood the housing market, as real estate is traditionally seen as a safe investment against devalued currency. Overall, rising prices is the biggest challenge for anyone – especially those making their first purchase – who wants to buy a home. 2. Rising Interest and Mortgage Rates The high price of homes alone serves as an impediment for first-time homebuyers. But it's not the only factor boxing first-time buyers out of the real estate market. Rising interest and mortgage rates are also squeezing first-time homebuyers especially hard. Consider a couple buying their first home. They're targeting a mortgage of $200,000, which is already far lower than the median in many markets. Rising interest rates, which the Federal Reserve introduced to tamp down inflation, have risen from 2.6% to around 5% in the past 16 months. The $200,000 mortgage the buyers are targeting? It's now more than $200 per month more expensive than it would have been 16 months ago. Skyrocketing mortgage rates mean that the competition for affordable homes is even higher than before – prospective buyers seem, on average, aware that rates are likely to rise even further in the short and medium-term. 3. Slowing Wage Growth As if rising home prices and steeper mortgage rates weren't enough, first-time homebuyers also face the new challenge of apparently slower wage growth. In the wake of the COVID-19 pandemic, government stimulus, and a historically tight labor market, American wages grew fast. But that wage growth has cooled somewhat in the early part of 2022, with more people working or looking for work and employers feeling less pressure to offer pay increases to bring people into the labor force. Slower wage growth may be a relief to people concerned about inflation, but is in the short-term a major difficulty for homebuyers, especially those purchasing for the first time. Wages are generally not keeping pace with inflation, and the preexisting high price of homes and rising mortgage rates mean that many young buyers are less equipped to buy than they were months ago. For the immediate future, first-time homebuyers are likely to struggle to enter the housing market. In the long term, tapering home prices and mortgage rates and increased inventory could make for a friendlier first-time homebuyer market. To view the original article, visit the Homesnap blog.
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Are We in a Real Estate Bubble?
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Will Housing Prices Ever Stop Rising?
Ask people about how real estate was affected by the COVID-19 pandemic, and they tend to give the same answer: buying a house got way more expensive. Now, after nearly two years of soaring prices, buyers, sellers, and agents all may be wondering whether the price of homes will ever drop or even level off. There are signs that the market is cooling, but also broad economic trends indicating that the price of homes, along with the price of everything else, isn't likely to plunge anytime soon. Here, we take a look at some of the factors affecting housing prices. Agents can use this guide to plan for this year and to answer inevitable client questions about how expensive buying a home will be in 2022. Why Are Homes So Expensive? It's natural for clients to wonder: Why have home prices risen sharply over the past two years? In short, the answer is classic supply and demand. Demand for buying was turbocharged by lower mortgage rates that incentivized buyers to borrow and COVID-related changes to how we live and work that left people yearning for more space. Supply was constrained by a slowdown that made it hard for home builders to get the materials necessary to build new homes. This glut of eager homebuyers and a limited supply of homes led to the hottest housing market on record, with the average American home price increasing by 25% since March 2020. Add in burgeoning iBuying technology and the trend of real estate investors snapping up homes, and it's no wonder that many would-be first-time home buyers have found themselves priced out of the market. Conversely, high prices have been a boon to home sellers, who have been able to sell their homes quickly and often above the original listing price. What Factors Will Affect Home Prices in 2022? Clearly, the high price of homes affects your clients, whether they're buyers or sellers. As you counsel your clients about home prices this year, keep an eye on these three market factors. 1. Mortgage rates Ultralow mortgage interest rates fueled much of the recent housing boom. For people who kept their jobs throughout the pandemic and saved money, low interest rates meant low borrowing costs, which helped drive up the price of homes. These ultralow rates appear to be coming to an end. The average rate for a 30-year fixed-rate loan is now 3.22%, up from a year ago, when the rate was at 2.65%. Plus, the Federal Reserve plans to raise short-term interest rates this year, which will likely cause mortgage rates to rise further. In January 2020, the average mortgage rate was 3.7%, and the National Association of Realtors expects that rate to return by the end of 2022. While that rate is unlikely to crater the housing market, it would likely result in a slower rise in home prices. Overall, you should keep an eye on mortgage rates. If the 30-year fixed mortgage rate approaches 4%, it's a sign that the market is cooling, and that home prices are likely to stabilize. 2. Inflation If you've shopped for groceries or tried to buy a car, it's been obvious: things are getting more expensive. In 2021, the U.S. inflation rate rose the fastest it has in 40 years, to 6.8%. Whether inflation is likely to be temporary or persistent is unclear, but if history serves as a guide, inflation will affect the price of homes and the real estate strategies of buyers and sellers. Traditionally, real estate has been a "safe haven" for investors, because home prices rise relative to the size of the economy. When inflation surges, homeowners are in a stronger position because the cost of homes rises alongside everything else. For home buyers, especially first-time buyers, high inflation is bad news because it's more expensive to buy a home and harder to save for a down payment. The opposite is true for sellers, who can jack up their asking price and still receive offers. We recommend that you monitor the rate of inflation. If inflation rises, your clients should expect higher home prices. If, as some economists predict, inflation falls, the price of homes is less likely to rise, making for a more buyer-friendly market. 3. New home construction Among the most influential accelerants of home prices in 2020 and 2021 was a dearth of available homes. During the past two years, home building suffered alongside many other industries, as pandemic-induced manufacturing shutdowns and slowdowns made it hard for builders to get the materials necessary to build a home. Those issues haven't entirely gone away, but new housing permits and construction starts have recently risen above pre-pandemic levels. Monitor the rate of new home construction in your region. If new home construction skyrockets, the price of homes will likely be held in check. If there is minimal new construction and development, expect more buyers than available homes, and a rise in prices. As an agent, giving clients an honest and accurate perspective about trends in the housing markets is important. Overall, signs point to home prices that will continue to rise in 2022, but not as rapidly as in the two preceding years. But indications are only that, and the best way to give clients the best perspective on their market is to follow it closely. To view the original article, visit the Homesnap blog.
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[Best of 2021] When Will U.S. Buyers See Relief from Skyrocketing Home Prices?
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Is October the Best Time to Buy a Home?
After spring and summer with a surprisingly low inventory of homes for sale, October may be this year's best month to shop for a house. If your real estate prospects are renting and looking to buy, but are on the fence about when to start looking for your new home, share this infographic with them. They'll see the top reasons why they might want to begin their home search now. To view the original article, visit the Rental Beast blog.
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How to Identify and Track Your Real Estate Competitors
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When Will U.S. Buyers See Relief From Skyrocketing Home Prices?
Home prices usually follow the laws of supply and demand: when demand is strong, supply diminishes, and prices rise, creating an incentive for owners to sell and builders to build. As the supply of homes for sale increases, those high prices moderate or decline. But, on a year-over-year basis, U.S. home prices have increased for an astounding 110 months straight; and since the pandemic began, they've risen at an extraordinary pace. Just this past April, the median home sales price in the U.S. was $341,600, nearly 20% higher than the year before. So when can buyers expect to see some much-needed home price relief? Too Much Demand, Not Enough Supply The issue with the law of supply and demand lately has been…well…not enough supply and too much demand, especially surrounding new home builds. Builders can't keep up with new home demand due to shortages of materials and appliances, along with skilled labor. Lumber prices alone are more than 250% higher than last year, and are adding nearly $36,000 to the average cost of a new build. The extreme supply shortages have driven up the median price of new homes to $372,400, the most substantial annual gain since 1988, when prices rose 87% in one year. New home builds aside, we're also seeing two of the largest generations in history — millennials, and Generation Zers, reach homebuying age and ability. More than 80% of millennials plan to buy a home at some point in their lives, and last year, 39% of all homebuyers were younger than 40. Mortgage rates below 3% ignited the generational pressure to purchase, and home sales surged to the highest level since 2006, despite pandemic challenges. Record sales quickly drained available inventories, and by the end of 2020, supplies of homes for sale were the lowest since 1999, when the National Association of Realtors first kept inventory records Now, inventory is so low and prices so high that sales are finally starting to slow, falling for the third straight month in April. (READ MORE: How Are Sellers in the Current Market REALLY Doing?) Can the Drought Get Any Worse? Even though record numbers of millennials are entering the market, it's not a journey some want to take with seemingly no home price relief in sight. Buying a first home is so expensive today that nearly one out of five prospective millennial buyers say they are giving up on homeownership and plan to rent for the rest of their lives. Will their sitting out the market help ease inventories? Not likely, at least not right now. There's no sign that the laws of supply and demand can restore balance to the real estate economy any time soon, and it may be just a matter of time until the inventory drought shuts sales down to a trickle. Still, there are some positive signs that demand will decrease and supplies will increase enough to bring some home price relief: Mortgage Rates Should Increase, Tempering Demand-driven Price Hikes Home price relief won't happen until mortgage interest rates rise and home supplies improve. For two years, forecasters and mortgage companies have said that higher rates are just around the corner. This year, they may be right. Inflation is suddenly surging for the first time in decades, and Fannie Mae's economists predict housing could contribute more than two percentage points to inflation by the end of 2022. The forecasted rates on a 30-year fixed mortgage will reach 3% by mid-year and stay above 3% through 2022. The Mortgage Bankers Association sees rates reaching 3.5% by the end of 2021, and 4% in the second quarter next year. New Home Starts Are Up The inventory of previously owned homes reached record lows in April, but on a year-over-year basis, housing starts (new homes being built) in March surged to a nearly a 15-year high, and April starts were 67.3% higher than they were in April 2020. Fannie Mae forecasts an aggressive 16.3% increase in single-family home construction this year over 2020, but that increase in new homes amounts to about 2.4% of demand — far below what is needed to meet it. As Price Appreciation Slows, Sellers Will Become More Motivated Just as the fear of higher mortgage rates motivated buyers in 2020, the fear of falling prices driven by rising rates will motivate sellers. As a result, listings may begin to increase on a year-over-year basis in the first quarter of 2022, when sellers prepare for the spring sales season. Baby Boomers, who own 41% of the nation's homes, have been much slower than earlier generations to downsize as they age. Millions of Boomer homeowners lost more than a decade of appreciated equity after the housing crash in 2007, and many are waiting until prices peak to sell and regain as much equity as possible. In last year's price boom, older Baby Boomers sold their homes at a higher rate than any other age group. When it's clear that the current boom has run its course, more Boomers will be listing their homes for sale. The Experts Forecast Significant Changes in Prices by 2022 Economists at Fannie Mae and Freddie Mac and several of the best real estate data and analytics firms forecast changes in market trends two years in advance. As of May, Fannie Mae forecasted that the median national price will rise 9.5% for new homes this year but only 4.4% in 2022. Home prices will continue to grow at 12.2% this year and 3.9% next year for existing homes. As of April, Freddie Mac forecasted that the price boom would end this year. Freddie's experts forecasted that all home prices, new and existing, will increase only 6.6% this year―a decline from 11.3% in 2020―and 4.4% in 2022. The respected real estate analytics firm CoreLogic agrees that home price increases will slow down this year, reporting that median year-over-year national price increase will fall to 2.8% by April 2022. Lawrence Yun, chief economist at the National Association of Realtors, also agrees. "We'll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes," said Yun. "In addition, the falling number of homeowners in mortgage forbearance will also bring about more inventory." "Despite the decline, housing demand is still strong compared to one year ago, evidenced by home sales from this January to April, which are up 20% compared to 2020. Moreover, the additional supply projected for the market should cool down the torrid pace of price appreciation later in the year," Yun said. The Bottom Line Mortgage interest rates are the critical factor driving housing demand. It's more than likely that by the end of this year, rates could drive upwards of 4% or higher. Sellers, led by Boomers eager not to miss the price peak, will bring a modicum of relief to the inventory shortage. In 12 months, the rate of price appreciation for single-family homes will be half its current rate of 19.1%, if not lower. By then, inventories will improve but won't return to healthy levels until pent-up demand is met and new home construction makes a more significant contribution. So while we can't expect to see home prices fall, we can expect their increases to slow down significantly. Steve Cook is the editor of the Down Payment Report and provides public relations consulting services to leading companies and non-profits in residential real estate and housing finance. He has been vice president of public affairs for the National Association of Realtors, senior vice president of Edelman Worldwide and press secretary to two members of Congress. To view the original article, visit the Homes.com blog.
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Why Builders Can't Keep Up with Home Sales
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How Are Sellers in the Current Market REALLY Doing?
We've all heard about the on-fire housing market and how it's positioned sellers to ask for much while conceding little. But just how much are sellers in the current market really reaping hefty benefits? How are they feeling about the selling process? What desired outcomes are guiding their selling decisions? Homes.com surveyed 1,600 respondents from across the country to find out. Survey Findings Snapshot The current market is paying hefty dividends for sellers, prompting many homeowners to put their homes up for sale sooner than planned to take advantage of market conditions. Our survey found that 82% of homeowners who sold in the last six months accepted offers at listing price (33%) or above (49%), nearly half of them sold in less than a month, and a quarter of them had five or fewer showings before finding a buyer — reflecting both the low supply of available homes and the rush to buy when new listings hit the market. Shortage? What Inventory Shortage? One of the major hesitancies homeowners have in today's market is a concern about low inventory — and for good reason! Who wants to sell their home without the guarantee of finding another home to buy? But, as our survey found out, this wasn't as big a problem as might be expected. Significantly, of the sellers we surveyed who intended to sell and immediately buy a new home to move into, 86% were able to do just that, despite limited inventory. The rest cited a move into rentership while continuing to house shop. Of the sellers who didn't have any plans to buy after selling, 24% said they moved into their secondary home, 19% had already purchased a new home build and rented while waiting for construction to complete, 11% began renting simply because they wanted to, and 9% decided to move in with family or friends. Smooth Sailing Sellers haven't just enjoyed the success of buying new property; they've also reaped the benefits of smooth selling processes. Looking at finances, our survey found that 49% sold above listing price, while 33% of sellers sold at their original listing price. In fact, 27% wound up accepting offers $10,000, even $20,000+ higher than their requested sale price. Cha-ching! Glancing at the process between listing and offer acceptance, 27% of sellers said they had five or fewer in-person showings before selling, while 26% had between six and ten. Amazingly, nearly 10% had no in-person showings at all. But, this is perhaps not as surprising as it might be in previous years; thanks to the growing prevalence of virtual tours, there's been an upward trend in buyers' openness to purchase a home sight unseen. We also found a strong correlation between the number of showings sellers' homes had, and the number of offers they received. A third of sellers said they sold their homes within the first five offers received, and nearly two-thirds wound up selling within the first 10. This roughly correlates to the number of showings, indicating that sellers received bids after virtually every walkthrough. It also offers a glance into why homes are flying so quickly off the market so soon after being listed! If you've been helping clients on the hunt for a new home, you've likely encountered this scenario: your buyers find a home they love, you schedule a tour for as soon as you can, but by the time you get there, the home has already been sold. You're in good company; this blink-and-you-miss-it issue has been plaguing buyers across the country for months, and doesn't show signs of slowing down! When we asked sellers how long their homes were listed before they sold, 22% said the process took less than two weeks, 25% were on the market between two and four weeks, and 27% for between one and two months. In other words, only less than a third of sellers' listings were on the market for longer than two months. Calling the Shots Another story dominating headlines in the real estate sphere lately has been just how much power sellers have over the purchase process. A mix of sharp demand and low inventory have left sellers holding all the cards, and our survey found they're using them to their full advantage! Many of the sellers surveyed indicated they refused consideration of contingencies and other strings-attached offers; 28% of them required all-cash payments, no contingencies and/or less than 30 days to close, while 14% opted for selling their homes completely "as is," leaving buyers without the flexibility available in less competitive markets. Interestingly, we found that they were more amenable to making repairs requested after showings or home inspections, with 56% agreeing to perform repairs, upgrades or replacement requested by buyers as a condition of sale. Of those who made those adjustments, 34% spent $10,000 or more, but one in four were able to recoup those costs by selling for $10,000 or more over listing price. Why Did They Sell in the First Place? As if the initial adjustments to pandemic life weren't stressful enough, our survey found that COVID-19 challenges were major drivers for homeowners deciding to sell; 43% cited financial impacts from the pandemic as their primary reason for selling. Other reasons included job relocation (14%), upsizing or downsizing needs (14%), a desire to move to another neighborhood (8%), retirement (4%) or a transition to remote working providing the option to relocate (4%). For many sellers, the market itself was influential in their process, with one in three entering the market only because they saw the opportunity to sell quickly and profitably. Twenty-three percent said their local market opportunities sped up their planned timeline to sell, while a surprising 11% actually hadn't planned to sell at all, but changed their minds in hopes of cashing in on the booming demand. And yes, this did happen; 5% actually received unsolicited offers on their homes, and they wound up selling them! What Can We Expect Moving Forward? It's not likely we'll see immediate relief from this blistering market any time soon; however, Homes.com will continue this survey series with a focus on homeowners who are planning to sell in the coming months. What types of homes will they be listing? At what price will their homes be listed? Will they be more willing to negotiate terms? Stay tuned to find out! To view the original article, visit the Homes.com blog.
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Spring 2021 Housing Market: Will the Extremes Calm Down?
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Will the Great Urban Flight Last?
As COVID-19 has ravaged across the country, millions of people have faced lockdowns and home quarantines. Homes have become classrooms, offices, recreational spaces, and countless other identities. Especially in urban areas, walls have increasingly felt like cages, leaving residents craving open spaces, more square footage, and greenery. What has since transpired is nothing short of a phenomenon we're calling "The Great Urban Flight."
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The Collateral Damage of the Pandemic on Real Estate
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How 2020 Changed Homebuying and Selling
In the first week of March 2020, hundreds of thousands of home sellers put final touches on their properties before their agents listed them for sale. At the same time, a new and deadly coronavirus strain was sweeping the globe. Within a matter of weeks, home sales would plummet to their lowest levels since the housing crisis of 2007, and by year's end, 2020 changed homebuying and selling in drastic ways.
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2021 Housing Inventories: Will They Run Out?
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5 Predictions for the 2021 Housing Market
Following one of the strongest years for residential real estate on record, the 2021 housing market has some large proverbial shoes to fill. Both home sellers and buyers fared well in 2020; median home sale prices reached a record $304,100, surpassing $300,000 for the first time in history, while mortgage rates hit record lows. Optimistic housing economists expect a recovering national economy to improve the housing market even more in 2021. They see it motivating sellers who sat on the sidelines in 2020 and restoring confidence to buyers who did the same. Some housing forecasters have even predicted that 2021 will be a better year for residential real estate than 2020. Not everyone agrees with the rosy outlook, however.
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4 Factors Influencing the Real Estate Rebound
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3 Key Stats that Show Just How Busy 'Busy Season' Was
There's no doubt this has been the busiest busy season in some time. Spring shutdowns delayed the peak home-buying period by two months, and a pandemic-induced exodus from cities has resulted in a record-setting number of transactions in the suburbs. But just how busy is busy? Our data scientists crunched the numbers, and the results are even more mind-blowing than you might have thought.
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27 Real Estate Statistics You Should Know and Understand
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5 Shocking Yet True Real Estate Statistics
An article published by The Close highlights 57 real estate statistics that help real estate agents and those in the industry understand their market better. Understanding and leveraging these statistics to your benefit is the goal of this blog post. We have highlighted five of the statistics in the article that we feel is the most crucial to your real estate career. To learn more, please continue reading:
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Understanding the 2020 Real Estate Market
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Real Estate Agents' 2020 Market Predictions
Will 2020 favor buyers or sellers? What will be the biggest barrier to homeownership this year? What can agents do to prepare first time buyers? We asked over 400 real estate agents across the country what they think will happen this year. Do their predictions match what's happening in your local area?
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Friday Freebie: 2020 Real Estate Market Outlook
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How to Create a Market Activity Report for Any Neighborhood
When your clients or prospects are interested in tracking a neighborhood's activity, the RPR Market Activity report is the perfect fit. First, it's flexible and can be generated for any geography, even areas drawn by hand using the RPR map. In addition, the report itself includes changes in a local real estate market based on listing information and MLS data.
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What Does a Possible Economic Recession Mean for the Housing Market?
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Don't Make These Mistakes with Your Market Reports
Even folks who aren't thinking of buying or selling a home in the near future enjoy reading well-written real estate market reports. If you aren't using market reports in your marketing efforts, you're missing out on a prime opportunity to show your area expertise. However, it's not enough to slap up an MLS graph and call it a market report.
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5 Simple Steps to Share Your RPR Market Activity Report on Facebook
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RPR Reports: A Member's New Best Friend
Whether you're new to NAR or simply new to Realtors Property Resource, we're here to help get you started and get you using the most powerful business data tool in real estate. One of the many advantages to being a REALTOR is members-only access to RPR. What Is RPR? Realtors Property Resource is the nation's largest property database. As a new agent, this user-friendly, data-driven platform and business tool should never leave your side. Regular use of RPR will help you help your clients, which can lead to more listings, and hopefully, more deals! RPR makes it easy for REALTORS® to stand out from their competition. Using RPR as a real estate business tool will make you a more informed, more savvy, and more efficient REALTOR®. Ready to better serve your clients, market yourself like a pro, and grow your brand and business? Let's dive in... On-the-Go and in the Field, RPR Reports Give REALTORS® an Edge RPR reports put property details, market trends and neighborhood insight into one, convenient package that you can access anywhere, anytime. Picture this scene: you're conducting your first property walkthrough with your first clients. After viewing the home, your clients ask a basic question or two about square footage and number of BD/BA. But after the softballs, in come the curveballs! They might ask about taxes, warranties, school ratings, flood zones, property history, community resources, etc. As a REALTOR® with the RPR app in your palm, you can literally tap into RPR and instantly pull up real time, dynamic property data. You can even customize a property report with client comments, notes and photos, and text it to them right there on the kitchen island. Armed with these comprehensive reports, you can quickly and confidently answer any and all questions. Which will put your clients at ease, and position you as a knowledgeable, local real estate expert. RPR Report Topics RPR reports are a breeze to create and the customizable features will surely impress your clients. Here's a list of the different types of reports you can create: Buyer Tours: Select properties to tour, determine the order you'd like to see them, and create a colorful, client-friendly report to share with buyers. Market Activity: The report includes samples of active, pending, sold, expired and distressed properties, as well as recent price changes and upcoming open houses for a period of up to three months. Neighborhood: Paint a lifestyle picture with details on employment opportunities, traffic, weather, parks, dining, etc. The Neighborhood Report summarizes economic, housing, demographic and quality of life information about an area. Schools: Summarizes student populations, testing outcomes, parental reviews, ratings, and contact information about a public or private school. Compare schools within a district or a specified radius, and/or select up to 20 nearby listings to include in the report. Property Valuations: Gives details about the overall characteristics of a property such as values, foreclosure activity, market statistics, demographics, history, taxes and school information. Mini Property: The Mini Property Report is all about the essentials and includes info on the estimated value; home facts like bedrooms, baths and square footage; and photos. It's a great way to share property data with buyers at the onset. Property Flyer: A quick and easy way of marketing any property. Upload your own photos, enter a headline, and/or details about an upcoming open house. Seller's Report: Reviews the subject property, shows the condition of the local market, presents comparable properties for side-by-side comparisons, recommends a pricing strategy, and shows estimated seller proceeds. New REALTORS® Should Also Become New RPR Users! An easy-to-use, real estate tech tool that will make your job easier and make a serious, favorable impression on potential clients?! Yep, it's true. And it's literally made just for you. Visit the RPR site today and be sure to install the RPR app to your tablet or smartphone. Access to this powerful, real estate data tool is exclusive to REALTORS® and best of all, it's completely free as a part of your NAR membership. And also make sure to join the RPR Facebook Connect group. To view the original article, visit the RPR blog.
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3 RPR Report Customizations You Should Be Doing Now
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[Infographic] Best Seasons to Sell a Home
Ask most anyone which season is the best to sell a home, and likely, with little hesitation they will respond, "Summer." This stands to reason. Schools are out, giving families a clean break to transfer children to a new area. The weather is much nicer for attracting people to open houses. Many have a starry-eyed, relaxed attitude, freeing brain space to dream and plan for change. It can be, with well-laid plans, the perfect time to sell. But is it the BEST time to sell?
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Understanding the Real Estate Market to Generate More Sales in 2019
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Are You Keeping Home Sold Price Records?
When you want to look up some home sold prices for comps or other purposes, it's fast and easy to go to the MLS and get them. Do you know how long your MLS database keeps home sold prices where you can access them? Many remove them after five years, but check your MLS rules or ask, as it's important information. Whether you've checked or not, virtually everyone at some time or another wants information about home sold prices, and serious buyers and investors want long-term price appreciation information as well. The key here is "long-term." If your MLS is purging sold records after five years, that's all the reliable historical data available. There must be some value in having older sold price information, and you can build your own database easily.
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Research Properties with the RPR Map
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Share This: Market-Driven Graphics Your Sphere Will Love
Want to spruce up your website, blog, or social media profiles with sophisticated, market-driven imagery? Today, we'll show you how to take advantage of a resource that's free to you as a dues-paying REALTOR. Take Advantage of High-End Market Visualizations We all know NAR-affiliated realtor.com as a popular property search portal--but did you know that the site also has a Research section that's chock-full of interactive maps and charts that you can share with your clients and prospects? It's true--and REALTORS are free to embed, download, and re-post these visualizations across their marketing channels! Here's a sampling of the interactive reports realtor.com currently offers, and suggestions for how to use them in your marketing efforts:
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Find the Local Market that Offers the Best Growth Opportunity
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Top Job Markets for Real Estate Professionals vs. Top U.S. Real Estate Markets
As with the start of any year, professionals within the industry are anxious to know the markets where they have the most opportunities for business. As WalletHub points out, "location, location, location might be the most hackneyed expression in the real-estate profession," and applies to both the real estate professional and their clients. Recently, WalletHub analysts "compared 150 of the largest U.S. cities across 14 key indicators of a healthy real estate environment." The findings of the study were intended to highlight the best places to be a real estate agent in 2017. Check out how their top 20 compare to what realtor.com predicated as the top housing markets for 2017. WalletHub's Top 20 Places to Be a Real-Estate Agent Honolulu, HI Seattle, WA Denver, CO Boston, MA Aurora, CO Madison, WI Reno, NV San Francisco, CA Irvine, CA Austin, TX Colorado Springs, CO Portland, OR Henderson, NV Lincoln, NE Santa Rosa, CA Spokane, WA Nashville, TN Vancouver, WA Washington, DC New York, NY "In order to determine the best cities for real-estate agents, WalletHub's analysts compared 150 of the most populated U.S. cities across two key dimensions, including 'Job Opportunity & Competition' and 'Real-Estate Market Health.'" Each city was graded individually and on a 100-point scale.
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Grow as You Go: Searching Your Subject Property on RPR®
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Friday Freebie: Guide to Mobile Engagement
The explosion of mobile devices has changed how consumers search for real estate. More importantly, it's transformed how your website generates leads. Think that prospect who couldn't access your site on their iPhone will visit again from their laptop? Think again. The truth is, if your site isn't optimized for mobile, you're missing out on a huge number of leads. Mobile is an intimidating world, and it can be hard to know where to begin. In this week's Friday Freebie, we highlight a guide that can show you exactly where to start. Download a free whitepaper from Delta Media Group Delta Media Group started seeing dramatic changes in consumers' online search behavior starting in 2010. "Those changes in behavior are maturing now," said Delta CEO Mike Minard in a recent interview. "The method in which REALTORS® need to engage these customers is different." To get agents and brokers up to speed on these changes, Delta has released an informative white paper that's easy to read, regardless of your level of tech savvy. "The Mobile Customer Experience: Trending, Optimization, and Application" explores recent trends in online engagement, backed by traffic statistics from over 35,000 websites. In this free paper, agents and brokers will learn more about: Mobile engagement trends Measuring client expectations Mobile web vs. apps Click here to download the white paper now!
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Product Review: RBIntel
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Is there a market for haunted homes?
With a two-year-old and an eight-week-old at home, it's not often that I get a chance to kick back and watch a little television. However, last Friday I was fortunate enough to get a couple of hours to zone out in front of the tube. I caught a show on the Travel Channel called "Ghost Adventures," where a group of three "ghost hunters" lock themselves into a haunted location overnight and use various gizmos and gadgets to capture haunted activity. This particular episode featured a young couple who had recently purchased Black Moon Manor in Greenfield, IN. Since their purchase, the couple has experienced "unexplained" activity and asked the "Ghost Adventures" crew to investigate (cue the "Ghost Busters" theme music). As the crew interviews the owners and videos the inside of the house you have to wonder, why on earth would anyone buy this property?
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How to Use the RVM in a Pricing Discussion
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Mobile stats stack well for Rand Realty
I recently had the chance to sit down with the great folks over at BHG Rand Realty, New York, to discuss their current mobile strategy, changes they want to make to the present and where they want to go and do in the near future.  Matt and Joe Rand proved to be industry leaders on the mobile real estate forefront over a year ago when they launched the robust mobile version of www.RandRealty.com which was unlike any mobile site of its kind at the time.  Their new initiatives will only serve to continue that statement, I can assure of that having had a sneak peak, but that’s not what we will focus on here in this column. Instead, what I think is even more worthwhile than discussing what they will be doing, is reviewing the success they have had with what they have already done.  A report that was presented in during this meeting showed that their mobile website was the 12th largest source of traffic, just slightly less than Realtor.com the 11th largest source.  If that doesn’t put in perspective how any consumers are accessing your website from their mobile devices on a daily basis than I don’t know will.
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HomeGain Releases 2nd Quarter 2011 National Home Values Survey Results
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How Branding Builds Trust and Familiarity for REALTORS®
Every type of business needs to pay close attention to branding, real estate included. Most potential clients don’t know anything about your business until you establish and build relationships with them. Their first impressions and perspectives of the company will come straight from whatever branding they’re exposed to. Even after clients know you, branding continues to affect how they view the company. It serves as a reminder that the company is successful and always ready to help them connect with the property of their dreams.  
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