Real Estate Tips

Home Sellers Saying no to FSBO in Recovery

Blog, Real Estate Tips, Selling   |   Dunham Stewart
Even though prices have risen as much as 12 percent this year, more than any year since the end of the boom in 2007, sellers are not trying to sell their homes without the help of a real estate professional. Historically, for-sale-by-owner transactions accounted for between 15 to 20 percent of the market.

In 2008, as the last boom ended, “for sale by owner” transactions reached 13 percent of all sales as sellers sought to avoid the expense of paying a commission to a brokerage. As prices and sales plummeted, so did FSBOs, falling to 9 percent in 2010. The figure tends to go up when the market is hot because it’s easier for sellers to go it alone, and that number declines during a down market because there’s a glut of unsold properties. However, FSBOs haven’t budged from that level in 2013 despite the strongest prices, tightest inventories and healthiest demand if five years. One-third of those FSBO sellers probably would not have needed a professional to market their homes since they knew the buyer prior to the home purchase, according to the National Association of Realtors.

Also, many of today’s FSBOS didn’t do much to market their homes. One-third of FSBO sellers took no action to market their home, and 60 percent did not offer any incentives to attract buyers. But homeowners who sell their property on their own may not always be able to tap the pool of buyers that an agent can in the open market, which could reduce the range of offers. And the process of selling a home can be painstaking and confusing, potentially more trouble than it’s worth. FSBO homes in 2013 sold for over 16% less than agent-assisted home sales.

The Delicate Balance Between Home Buyers and Home Sellers

Blog, Buying, Real Estate Tips, Selling   |   Dunham Stewart
Here is some advice I have been consulting clients with since the end of 2nd quarter: Year end is the best time sell, and 2013 year end maybe the best window of opportunity for some time to come. With serious buyers in the market, home sellers need to seize the opportunities. Here are 5 reasons:

1. THERE IS FAR LESS COMPETITION:  Supplies are seasonally low. Sellers who wait for the spring are guaranteed to have far greater competition. Consider if you have the best house in the neighborhood, it may not matter when you put your house on the market. For the 99.9% rest of us, sellers must consider buyers have many more choices in the Spring.

2. SERIOUS BUYERS ARE IN THE MARKET.  Fall and Winter are not typically inviting times to visit homes as a Sunday past time. As good as Spring and Summer are with shear numbers of buyers, winter (year-end) offers a greater percentage of ready to purchase buyers. Sellers now is the time get your home ready to meet action takers.

3. THERE WILL NEVER BE A BETTER TIME. In most markets, home values have spiked. Through the first half of 2013, prices have recovered, the declines suffered since 2007. Additionally, interest rates have remained at historical lows and all indications are there is only one way to go from here… up.

4. FINANCING WILL BE QUICKER. There is money to lend and the industry is “healthy” and competitive. Lenders have embraced technology and have streamlined the process. Most qualified lending institutions can get a loan approved within 21 days. Spring and Summer and especially the first half of 2013, lenders were inundated with both purchase and refinancing loan requests. Both of these have now slowed in the winter facilitating the shorter timelines.

5. IT’S TIME TO MOVE ON WITH YOUR LIFE. Examine the reasons you are considering selling and decide whether it is worth waiting. You have the power to take back control of the selling process. Competitive financing and year-end closings are potent buyer triggers.

What’s Driving the Luxury Housing Market

Blog, Market Updates, Real Estate Tips   |   Dunham Stewart
The biggest drivers behind the continued expansion of luxury home sales: Low mortgage rates, rising consumer confidence, cash buyers, and international buyers. International buyers are fueling some purchases, with an estimate of up to 20% of buyers in L.A. being from overseas. Many of them are paying full cash, speeding up closings and eliminating the need for appraisals. This year we are on pace to exceed the the all time high of 697 home sales over $5 million in California set last year in 2012, many of which were all-cash deals. However, with low mortgage rates, some luxury home buyers are financing their home purchases. Jumbo loans are traditionally associated with higher interest rates– about 0.25 percentage points more — than they do for conforming loans, according to the Mortgage Bankers Association. But over the past couple of months, the tables have turned. “Never in my memory have jumbos been such a bargain,” said Peter Grabel, a loan officer at Luxury Mortgage Corp. For example, some buyers who traditionally would pay cash are instead securing sub 3 percent interest rates and 10-year loan terms. One big reason jumbo rates are so low is because lenders want to attract wealthy clients and hang on to them, said Malcolm Hollensteiner, head of consumer lending for TD Bank. Once clients sign up for a mortgage, the bank can “cross sell them other products, like brokerage services,” he said. As for pricing, it won’t be long before the U.S. sees a $200 million listing — the record now is believed to be $190 million for a property in Greenwich, Conn. — but that many of these ultra-high-end properties are priced that way merely as a suggestion, or to invite only a certain caliber of buyers to the table. Most ultra-high-priced homes end up selling for 50% to 60% of the original list price. We are also seeing an increase in pocket listings, or listings that aren’t publicly put into the multiple-listing service, both as a way to keep a seller’s name confidential and to up the exclusivity factor.

Home Price Increases Are Slowing

Blog, Buying, Market Updates, Real Estate Tips   |   Dunham Stewart
Home price increases will end up at 6.7 percent year-over-year before slowing to roughly 4.3 percent next year, on average, and eventually falling to 3.4 percent by 2018, a panel of more than 100 forecasters concluded. The Home Price Expectations Survey was conducted from Oct. 21, 2013 through Oct. 31, 2013 by Pulsenomics LLC on behalf of Zillow, Inc.The survey of 108 economists, real estate experts and investment and market strategists said appreciation is expected to remain strong through the remainder of this year, but the pace of home value growth is predicted to slow considerably. Based on current expectations for home value appreciation over the next five years, panelists predicted that overall U.S. home values could exceed their May 2007 peak by the first quarter of 2018. “Rising mortgage rates, diminished investor demand and slowly rising inventory are all contributing to a modest cooling off of the housing market, which is both expected and welcome after months of unsustainable, breakneck appreciation,” said Zillow Chief Economist Dr. Stan Humphries. By comparison, the CoreLogic Case-Shiller Indexes, though they reached 10.1 percent year-over-year in the second quarter over 2012, are expected slow to an average of 5.4 percent across all U.S. markets by the end of this year. CoreLogic Case-Shiller projected that price appreciation will decelerate through the second half of 2013 and into the beginning of 2014.

Investors Are Leading the Way in Real Estate Market

Blog, Market Updates, Real Estate News, Real Estate Tips   |   Dunham Stewart
Though most real estate market observers have been predicting that rising home prices would drive investors out of the market for single family homes, that fact is that investors have purchased more homes than they did in all of 2012 or 2011. Investors have purchased more than 370,000 properties so far in 2013, which is already more than in either of the previous two full years according to a new investor insight report released today by RealtyTrac. The Real Estate Investor Purchase and Finance Patterns: 2011 to 2013, looks at a number of investor habits relating to real estate purchases since 2011, including the volume of properties purchased, breakdown of cash versus financed purchases, property situation (distressed, non-distressed, underwater etc.), investor purchases by property value, and number of investor-purchased properties that have since resold. A couple of interesting findings 1) Investors have purchased more than $1 trillion in US real estate since 2011. Fifty-four percent were all-cash; 2) Among all investor purchases during the time period, 57 percent have subsequently been re-sold. The smart money still sees the real estate market as a solid long term investment.

Why You Should Sell Your House Now

Blog, Real Estate Tips, Selling   |   Dunham Stewart
Many now realize that it is a great time to buy a home. It might also be an opportune time to sell your house. Here are the five reasons we believe now may be a perfect time to put your house on the market.

1. Demand Is High The most recent Existing Home Sales Reports by the National Association of Realtors (NAR) show a double digit percent increase in sales year-over year; sales have remained above last year’s levels for over 25 months. There are buyers out there right now and they are serious about purchasing.

2. Supply Is Beginning to Increase Total housing inventory is again approaching historic norms of a 5 month supply compared with 4.3 months in January. Many expect inventory to continue to rise as 3.2 million homeowners escaped the shackles of negative equity in the last 12 months and an additional 1.9 million are expected to enter positive equity in the next 12 months. Selling now while demand is high and before supply increases may garner you your best price.

3. New Construction Is Coming Back Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block.  As the market is recovering, more and more builders are jumping back in.  These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers.

4. Interest Rates Will Again Rise Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year.  The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by this time next year. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

5. It’s Time to Move On with Your Life Look at the reason you are thinking about selling and decide whether it is worth waiting.  Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should?

What Home Buyers Want

Blog, Buying, Real Estate Tips   |   Dunham Stewart
Many people shopping for real estate today are younger than previous generations of home buyers, and they’re extremely tech savvy. They grew up with smartphones, apps, and Google searches. And they want to use technology not only in their search for a home but throughout the home itself. The following list includes in no particular order things that are important to buyers today, especially Millennials who represent a significant buyer niche in today’s market. These aren’t your standard-issue young home buyers from 30 or 40 years ago, who were often married couples looking for a starter home in the suburbs to raise a family. Today, single women make up a large percentage of first-time buyers, as do gay couples and the always-connected mobile professional. As the home buyer evolves, so does the home. Here are five major shifts in homes you can expect to see today and in the coming years.

1. Energy efficiency – The National Association of Homebuilders surveyed buyers to see what was most important to them in new home construction and energy efficiency topped the list. Four of the top most wanted features involve saving energy: 94 percent of home buyers want energy-star rated appliances, 91 percent want an energy-star rating for the whole home, 89 percent want energy-star rated windows, and 88 percent want ceiling fans.
2. Home Offices – Even though a few companies are instituting a ban on working from home, most encourage it. And so, in our always-on culture, many people entering the real estate market are tethered to email well into the evening hours and on weekends. Many prefer to have one place dedicated to their laptops, printers and work-related stuff.
3. Man Caves – The media room or man cave emerged in real estate marketing a few years back. Many buyers now prefer high-tech rooms with surround sound, large-screen TV’s, and the most up-to-date A/V equipment to the coveted formal dining room of a generation’s past.
4. Hardwood Floors – Hardwood floors make a space feel less confined and give it a new, clean feeling. No matter how many times the carpet has been cleaned, there’s something about stepping on someone else’s carpet with your bare feet that turns off today’s buyers.
5. High Ceilings – Taller ceilings are not only aesthetically pleasing in that they impart a grandness to the home, they also promote greater air circulation and more natural light than lower ceilings.
6. Open Floor Plans – Spaces that are great for entertaining mean quality time with friends and family, something especially important to Gen Y.
7. Quality of Schools – A recent survey by revealed that nearly 45 percent of today’s buyers are willing to pay a premium for quality schools
8. Convenience to Job – Commuting is a necessary evil, but homes that are close to work enhance work-life balance, a growing priority for many Americans, especially Millennials.

Real Estate Investments vs. Stocks

Blog, Real Estate Tips   |   Dunham Stewart
As the economic recovery continues, Americans are again able to invest. Although there are many investment options available, real estate offers several advantages over most of them. First. is the ability to finance a portion of the purchase and leverage the initial investment. The benefit is that you now control an asset valued much higher – unlike stocks, bonds and CDs. Especially now with the historically low interest rates available, a small increase in the value of a leveraged property investment delivers a greater return than an unleveraged investment — approximately 12 percent gross. Investing in real estate also offers very valuable tax benefits, not so with earnings from investments in CDs, bonds and stocks are taxed. The numerous deductions from the profit on mortgage interest, property repairs and depreciation are very advantageous. In addition real estate investors are writing off depreciation of an asset that is typically appreciating providing yearly benefits to a long-term investment. Most importantly, ownership of rental property is an asset generates consistent cash flow. Subsidizing the investment with consistent rental income puts money in the investor’s pocket, covering the mortgage, repairs and additional expenses.

Manhattan Beach Real Estate Deal of the Week

Blog, Deal of the Week, Manhattan Beach News, Real Estate Tips   |   Dunham Stewart
{Video} Manhattan Beach real estate market Deal of the Week. This Manhattan Beach home for sale in 90256 offers beachy Santa Barbara styled prime sand section location…. spectacular white water ocean views, 3 blocks to the beach… “high perched” 30×60 lot, entertainers delight!!! . 3 bedrooms/3 bathrooms. over 2315 sq. ft . unique 1810 (btv) high slopping lot w/ magnificent views . master w/ walk-in closets, office, private patio & high ceilings . master bath w/ spa tub, clear glass shower enclosure & double sinks . 2nd & 3rd bedrooms w/ ocean views & high ceilings . top floor features: fabulous beach views, cooks kitchen w/ open floor plan, granite counters, breakfast bar and separate dining… area. living room w/ fireplace, high ceilings, surround sound and private deck. family room w/ 25 feet of glass view windows, high ceilings. This Manhattan Beach home for sale offers a private large deck w/ Palos Verdes to Malibu ocean views. other features include: . hardwood floors, new carpet and custom paint throughout . workout room/ playroom or 2nd office . over-sized garage/4 car parking w/ storage . close to the beach, restaurants, shops and Grandview elementary …so beautiful you won’t want to leave!! Great deal in the Manhattan Beach real estate market

Transform Your Yard With Outdoor Room

Blog, Design Tips, Real Estate Tips   |   Dunham Stewart
Inviting, sophisticated outdoor rooms are in high demand among home buyers, and they serve as a way to extend your homes living space. Adding life to outdoor spaces will help sell the ifestyle of a home. Outdoor living spaces have become the new ‘great room’ in terms of must-have items for home owners. Way too often backyards are boring and not brought to their full potential. You can make a home stand out by showing buyers all the potential your property has to offer inside and out. Here are staging tips to help buyers imagine gathering spaces, or entertainment coves that are possible with your property. 1) Conversation Areas – group furniture around a tabletop fire pit to show it as a great spot for get-togethers. 2) Entertainment Areas – place a table and chairs in the middle of a garden area and string lights around the trees surrounding it, capturing a warm glow. 3) Built-Ins – outdoor kitchens add 130 percent to a home’s value. 4) Water Feature – whimsical fountains and quiet reflection pools 5) Lighting – light play can be an important part of any landscape and add a whole new dimension to a yard. An outdoor space doesn’t have to be huge to make a big impact, send buyers a subtle message of relaxation and entertaining by creating vignettes.
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