Should we stay or go?

submitted by Kathleen Layton, Prudential Fox & Roach, Realtors – Newtown Office

Moving is one of the top five stressors in life, weighing in after death, illness, divorce and job loss, so most people don’t enter into the real estate market lightly. They ponder, contemplate, argue and look for signs from above before reaching a decision, which rarely comes easily. If you’re considering making a move, here are some factors to consider:

  1. You, your family and your stuff are starting to make you feel claustrophobic – and you don’t see it getting better any time soon. If you can’t store another thing under the beds and your seven-year-old is still sleeping in his toddler bed in a room with his two older brothers, it may be time.
  2. The house and grounds are starting to get the best of you, and keeping up with maintenance is becoming a challenge.  Don’t let your largest single asset start to deteriorate.
  3. Your up and coming neighborhood still hasn’t arrived, or is gradually becoming down and out.
  4. You’re using the equity in your home to get you through a “rough patch” that has lasted way longer than it should have.
  5. You had always considered this home to be a stopping point, not a destination, and have the financial ability to move up to your dream home.

If you’re a move-up buyer, it’s time to get off the fence and into the market NOW, while interest rates are still low and prices, while starting to increase, aren’t moving sharply upward. If you’re downsizing, it’s still a great time to sell as inventory levels are low and well-priced homes in good condition are selling quickly. The market has started its rebound no matter how you look at it. You’re not getting any younger – it’s time to move forward with your dreams and plans.

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Real estate market bounces back

submitted by Kathleen Layton, Realtor, Berkshire Hathaway Home Services Fox & Roach, Realtors – Newtown Office

Well…It’s official. The real estate market is finally back. Not to pre-crash levels of course, but firmly on solid ground and gaining.

After nearly a decade of despair reminiscent of the Great Depression, 2013 has seen real estate change from being a ball and chain around the neck of millions of Americans to an asset that has been one of the few bright lights helping to move this stubbornly sluggish economy forward.

While the housing market is still somewhat volatile, the “experts” are calling for increases in 2014 ranging from 5% over 2013 levels to 10-15% higher. In Bucks County, the number of units sold increased 20% over 2012 totals.

Nationally, home prices continue to rise faster than they have since the housing boom. The average sale price in Bucks County of $322,592 was up 2.3% and it took an average of 77 days for a house to sell, down 19% over the previous year.

Another key factor on the rise is mortgage interest rates, which have come up almost a point in 2013 and are now hovering around 4.5%. Expect them to rise even higher in 2014, possibly close to the 6% mark by the end of the year. Also expect to be put through the wringer if you’re applying for a mortgage this year. Lenders and underwriters are still re-living the horrors of the mortgage debacle and even immensely qualified buyers are paying the price through excessive documentation, explanation and all around hoop jumping.

We’ve returned to a “normal” real estate market, where neither party should consider themselves in the driver’s seat.

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The real estate market continues to improve

submitted by Kathleen Layton, Prudential Fox & Roach, Realtors – Newtown Office

Third quarter market statistics are in and show a continuingly improving real estate market in Bucks County. The average sale price is up 1.9% to $333,582 and the number of closed sales is up 28.3% over last year. The time it takes to sell a home is down to an average of 81 days, a reduction of 23.5%, inventory levels are down 12.1% and there’s a six-month supply of inventory which is down 26.4%, signifying a return to more “normal” conditions.

What’s it all mean? For one thing, the bottom of the market is clearly behind us and we’re finding ourselves in one of the busiest markets in years. While the pace has slowed somewhat, well-priced homes in good condition are selling in a matter of days, often with more than one offer to choose from. As the economy continues to improve, prices, as well as mortgage interest rates, will continue to rise. Most economists are forecasting a 2% rise in prices annually over the next several years.

No matter how you slice it, now really is a great time to buy or sell a home. If you need to sell your current home before you can purchase your next one, waiting until it appreciates isn’t the answer. Any gain you may make will be wiped out by rising interest rates and higher home prices for your new home. 

If you’re considering getting out of mom and dad’s basement or out of an apartment and into your own place – get off the fence and DO IT! The time will never be better.

The same holds true for those of you looking to expand your portfolio or diversify your retirement strategy. Rental properties are in high demand and an investment property could offer some long-term growth and passive income in those golden years.

There are still opportunities to be had in this market but who knows when that window will start to close? If the circumstances are right for you, now may be the time to make it happen.

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Thinking of selling your home? NOW may be the perfect time

submitted by Kathleen Layton, Prudential Fox & Roach, Realtors – Newtown Office

I’m sure by now that most of you have heard about how the real estate market has finally started to turn around – but what you may not heard is how dramatically things have changed. Sales are trending upward at a rapid pace and as a result, we have a lot of buyers in the marketplace with little to sell them.

Consider these recent statistics for Bucks County:

  • The average days-on-market is down 19%, with almost a third of all homes selling in 30 days or less.
  • Year-to-date over last year, inventory is down 22% but sales are up 17%.
  • The average sale price is up 3.5%, bringing the total volume sold up 21%.

Locally, homes that are priced right and in good condition are selling in a matter of days not weeks and multiple offers are not uncommon, as are offers close to, if not at or over, asking price.   With interest rates low, affordability is high – as rates rise homes will become less affordable.

Those of you who are downsizing, upsizing, empty nesters or considering job relocation may want to take advantage of this window of opportunity sooner rather than later.

Of course the first step in determining if a move makes sense is to have a reasonable expectation of what your home is worth. Your REALTOR® will provide a Comparable Market Analysis by reviewing recent sales and current listings, which should give you a pretty good idea of what to expect. They will also give suggestions on how to make your home more marketable.

Unfortunately, many people go to Zillow to get an idea of what their home is worth and come away with unreasonable expectations – both high and low. What the site doesn’t make easy to find is the accuracy rate for their “Zestimates.”

For the Philadelphia region, their Zestimate is within 5% of the actual sale price only 33% of the time, and within 20% only 78% of the time. Interesting stuff for sure, but hardly worth hanging your hat on.

The tides are turning and an experienced professional with hands on knowledge of the local inventory will help you navigate this changing market.

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Positive signs for single-family housing

submitted by Kathleen Layton, Prudential Fox & Roach, Realtors – Newtown Office

Single-family home sales will continue strengthening, according to latest report from the Urban Land Institute (ULI). The Real Estate Consensus Forecast, ULI’s semi-annual survey of the nation’s leading real estate economists and analysts, examined 26 economic and real estate indicators in the third quarter.

The report predicted healthy estimates for single-family housing as compared to ULI’s March report.

“The predictions diverge from the previous forecast [from March] in that it is more optimistic regarding the single-family housing sector,” said ULI Executive Director Dean Schwanke.

According to the report, single-family housing starts are projected to increase by 145,000 units in 2013, while home prices are expected to rise 3.9%.

Meanwhile, single-family home starts, which have been near record lows, are projected to increase from 530,000 in 2012 to 800,000 in 2014. All of these numbers show improvement from ULI’s March forecast.

“Finally, the single-family housing sector is experiencing a turnaround that is expected to continue,” said Schwanke. “The ULI Consensus Forecast from March projected a stabilizing housing market, and the most recent numbers have been strong, leading forecasters to be even more optimistic going forward.”

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First quarter home sales indicate market rebound

submitted by Kathleen Layton, Prudential Fox & Roach, Realtors – Newtown Office

Home sales and prices are rising at the fastest rate in seven years – a trend that has even the most seasoned analysts dumfounded.

Nationally, the median home price in March rose to $184,300, well below the 2006 peak of $230,400 but significantly higher than the $154,600 in January of 2012.

Here in Bucks County we’re experiencing a similar trend with regards to the pace of the market.

The number of settled units was up 11% over 2012 levels at the end of the first quarter, even though the median price remained at $265,000 and the average price fell slightly from $315,000 to $303,000. That may soon change if pending sales results are any indication, as they were up 15% in March, indicating a strong start to the spring market.

The Federal Reserve’s campaign to keep interest rates low is fueling the recovery and decreasing inventory levels ensure homes that are priced right and in good condition sell quickly – often in a matter of days and many times with multiple offers.

Inventory levels were down in Bucks County 10.8% in March year-over-year, while the month’s supply of inventory fell to 7, down 22% over 2012.

What’s it all mean?

Even though home prices are beginning to rise, thanks to historically low interest rates, housing is more affordable than at any time in the past 30 years. Most economists are revising their predictions for the housing market upwards and expect the trend to continue.

Now, if we could just get the banks to lighten up their lending criteria just a tad, more quality buyers would be able to take advantage of this opportunity.

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The real estate market is heating up…

submitted by Kathleen Layton, Prudential Fox & Roach, Realtors – Newtown Office

 … and we’re expecting the healthiest spring season since 2007.

Freddie Mac is projecting an increase in sales of 8-10 percent compared to 2012. Nationwide, we’ve seen 20 consecutive months of sales increases over the previous year, and prices have increased for 12 months in a row.

In the Philadelphia region, sales are up 26% January 2013 vs. January 2011, and inventory levels are down 22%. Things are no different here in Bucks County – we’re experiencing a marked change in the pace of the market so far this spring.

The number of houses selling is up, prices are up, inventory levels are down and the shift from a buyers market to one more equally distributed has already occurred in most price ranges. Properties that are priced right and in good condition are selling at a rapid pace, often in a matter of days and some with multiple offers.

A word of caution here, lest you think we’re back to the days of old, when you could ask whatever you wanted and some desperate buyer would actually pay it. Those days are gone, thanks to cautious appraisers and loan underwriters who work under strict guidelines to prevent lenders from getting burned again.

Buyers too are skittish – everyone knows someone who overpaid for a home that is now in foreclosure or a short sale and they don’t want to find themselves in the same position.

If you’ve been thinking of selling your home you could be pleasantly surprised. If you’re thinking of selling your home and buying a new one, the timing will never be better.

And if you’re thinking of becoming a homeowner again or for the first time, this fabulous window of opportunity that’s been open for the past few years may be slowly closing – did you know that a 1% increase in interest rates can cut your buying power by 10%?

No matter how you look at it – if you’ve got real estate on your mind, now is the time to act on it!

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Which remodeling moves provide more bang for the buck?

submitted by Kathleen Layton, Prudential Fox & Roach, Realtors – Newtown Office

Other than “how’s the market?” one of the most frequently asked questions I get from people relates to home improvements and which ones provide the best return-on-investment (ROI). Fortunately, Remodeling Magazine’s Annual Cost vs. Value Report for 2013 was recently released and provides some hard numbers by region.

While not technically a remodeling project and therefore not covered in the report, wallpaper removal, fresh paint and new carpet top the list for providing the biggest bang for the buck.

Pay no attention to those home decorating shows that say foil wallpaper is in vogue – believe me, they’re not talking about the stuff that graces the walls and ceiling of your powder room. And no – orange shag carpeting isn’t making a comeback, nor is it “retro.” It’s just plain ugly, I don’t care how many times you’ve raked it. 

That being said…

For the Philadelphia region, entry and garage door replacement top the list for cost recouped, coming in at 79.8% and 76.7% respectively. A wood deck (75.6%), vinyl siding replacement (68.6%) and attic bedroom remodel (68.5%) round out the top five best ROI.

Next comes wood replacement windows (68.1%), composite deck addition (67.5%), minor kitchen remodel ($20,894 – 67.3%), major kitchen remodel ($60,558-65.9%), two-story addition (64.4%) and basement remodel ($72,141-63.3%).

A home office remodel (42.6%) and a sunroom addition (48.5%) were found to have the lowest ROI.

Keep in mind that that the ROI is based on specific job specifications and cost calculations used in the report, which can be found at www.costvsvalue.com.

Your costs could vary widely, thereby affecting how much you recoup. You may want to consider asking your REALTOR about how the project you’re considering could impact the resale value of your home down the road.

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Is that the sound of recovery?

submitted by Kathleen Layton, Prudential Fox & Roach, Realtors – Newtown Office

SHHH….Can you hear it?  For the first time since the real estate market hit the skids, 2012 brought the first signs of a long awaited recovery.

Conversations have slowly but surely changed from the gloom and doom we heard on a daily basis, to a sense of hope and concrete signs of stability. The worst is behind us and we’ve turned the corner for sure.

Bucks County reported an increase in Pending Sales in every month of 2012, with a resounding 27% increase in December.

Settled properties followed suit, ending December with a 3% increase. Inventory levels were down 8% at year end, both median and average sale prices are up and the months supply of inventory – the time it would take to sell current inventory levels at the current rate of sale – is down 20%.

Hallelujah Chicken Little – the sky is no longer falling!

Another record that was set in 2012 was the Affordability Index. According to the National Association of Realtors, a score of 100 means a median-income household has exactly enough income to qualify for a median-priced single family home. In November 2012, the number clocked in at an incredible 198 – which busted the 2011 record of 186. 

The bottom line is this – the worst is over and we’re on our way back.  Not a reversion to the days of old – we’re talking slow and steady here, not off to the races.

The bulk of the activity is in the lower end of the market – most indications are that this will be a bottom up recovery, with high end properties taking longer than average to sell.

Home prices have stabilized and appreciation is expected to continue into 2013.

It truly IS an ideal time to buy or sell a home!

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