Feb 9, 2016
Any way you cut it, real estate makes up a huge chunk of the overall economy. One consequence of that is that the health of the real estate industry is constantly being put under a microscope (if it were a human patient, it would probably grow alarmed by all the doctors and specialists constantly calling it in for routine check-ups).
Everyone from Washington regulators to Ocean View tradespeople look to the performance of residential real estate as one of the most meaningful indicators of how everything else is doing. Locally, it’s not surprising that the pace of real estate sales in Ocean View always seems to align with many other area business prospects as a whole.
Probably because that’s true in most places, the National Association of Realtors® has come up with a new way to poke and prod the patient. It’s called the “HOME Survey”— ‘HOME’ being an acronym for “Housing Opportunities and Market Experience.” This is a somewhat strained way to describe the purpose, which is to find out how typical consumers feel about residential real estate in general, and homeownership in particular.
Instead of being another dry collection of statistics, this survey could turn out to be a lot more revealing than many others because it is going to be measured every month from now on—then reported every quarter. Even though it will be conducted nationally, I’m guessing that Ocean View real estate trends could well turn up here, since it is the changes in attitude that will become apparent.
Anyway, the first survey results are in—so we have a baseline we can use for comparison. These first findings reveal some very positive findings. Among them:
Since ‘The American Dream’ is such a generalized term, the survey attempts to nail down which features of owning a home are the most appealing. The three leaders are, “A place to raise a family” (36%); “Owning a place of your own” (26%); and “A nest egg for retirement” (14%).
It should be interesting for Ocean View real estate watchers to compare future findings with that baseline—and to see if local attitudes reflect the same kind of shifts. In any case, if your own feelings about home ownership match those findings, you can easily begin your own made-to-order version of a Ocean View “Housing Opportunities and Market Experience.” Just call me! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.
Feb 9, 2016
“The Jumbo Jungle” may sound a little like the elephant compound in a wild animal park, but it’s actually a seldom-quoted tab under The Wall Street Journal’s online Real Estate section. The “jumbos” being discussed are the trunkless kind—the hefty mortgage loans whose center rings are found in binders instead of circus tents.
Judging from the latest discussions Rehoboth Beachhomeowners will find lately, these jumbos aren’t about to become endangered anytime soon. For one thing, 2015 registered the highest activity for the behemoth loans ever. This year’s follow-up, according the WSJ, will be unlikely to slow the pace.
The reason behind the jumbo mortgage market’s strength has a lot to do with the down stock market. Last week ended with another swoon, led by the tech stock sector. Investors were thought to have been worried by some poor earnings performance and a general “realization that the world is slowing.”
According to Inside Mortgage Finance, jumbos accounted for a full fifth of all mortgage lending last year—the highest percentage of the market since 2002. Rehoboth Beachresidents looking to borrow in the high end market may also find a variety of interested lenders as asset investment dollars shift into real estate as “a safer investment.”
It was widely held that the market dip made it more likely to momentarily halt any rise in interest rates. By week’s end, mortgage rate research website HSH.com marked another drop in conforming rates, as well as the “Federal Reserve’s apparently more cautious position with regard to raising interest rates.” That “apparently” was probably well-advised, given industry experts’ recent history of hit-and-miss prognosticating.
Nonetheless, the Jumbo Jungle writers boldly headlined“WHAT’S AHEAD FOR JUMBO-LOAN BORROWERS in 2016.” Their answer was increased likelihood for jumbo loan interest rates holding below 4% “…for a while longer, which also could make borrowing large sums more attractive.” Going further, JJ quoted one mortgage sales manager suggesting that the fear of eventual rate rises could spur a “home buying frenzy” in the spring, adding to a rush of refinancing by adjustable-rate borrowers reaching the end of their fixed-rate terms.
Rehoboth Beach jumbo loan applicants won’t have to be in any kind of a ‘frenzy’ to take advantage of today’s continuing low rates and a general move toward an easing of credit score requirements. I’m glad to help point my clients toward the most active local lending resources—those that consistently provide sound service to Rehoboth Beachhomeowners. Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.
Feb 9, 2016
This one was news to me. The Wall Street Journal had it buried in a ‘spread sheet’ section of their online Real Estate section: “Why It’s Harder to Sell Your Home in an Election Year.” If you are like me—never having had an inkling that Bethany Beach homes for sale have rough sledding in an election year (like this one)—you’d have to read the details.
“The uncertainty of a looming election can cause a dip in home sales,” it detailed, “especially if the race is close.” The article was illustrated by a cartoon showing a neighborhood street whose every lawn was graced by alternate “vote!” signs and homes for sale signs. The underlying thesis was that in close elections, house hunters are reluctant to buy if an uncertain political future makes them unsure about their own financial fortunes.
This might sound reasonable from a logic perspective, but as you read further into the factual basis for the idea, you’re likely to start losing confidence.
The whole basis for the article is a political science paper published in 2014.
In the British Journal of Political Science.
Based on housing sales back in 1999-2006.
In 73 elections.
Most of us would begin to worry about why this couldn’t make the grade in a United States journal of political science, since it centered on U.S. elections. Perhaps a research quality issue? Then there’s the fact that those dates are 10-17 years old. There is also the puzzling notion that there have been 73 elections in the past couple of decades…but it turns out that they are dealing with gubernatorial elections from a select number of states. Perhaps our average house hunter checking out homes for sale in Bethany Beach actually does hang their financial fortunes on who the next Governor is going to be…but I wouldn’t bet on it.
As for Presidential elections, the article mentions a separate analysis that “uncovered a similar effect.” But, on closer reading, not really. This analysis was by someone who studied California sales only, and determined that in the Golden State, home prices rose by an average of about 1% less during election years. But they still rose by 4.5% in those years. If that means they were “harder to sell,” you’d have to explain why…
This is only a guess, but if you were trying to determine if it will be easier or harder to find buyers for Bethany Beach homes for sale in Election Year 2016, it seems more logical to look for factors that directly affect the buyers—such as today’s historically low mortgage interest rates. When buyers do the arithmetic showing how low monthly payments have become, I’m willing to bet that overshadows errant thoughts about who the next Governor is going to be.
If you are readying to buy or sell a Bethany Beach home, you probably don’t really need to worry about who will occupy the Statehouse as much as who will be helping you navigate the market. I hope you’ll elect me for the job! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.
Feb 9, 2016
Especially this time of year—and even more especially when our area’s weather turns grisly—common sense would seem to lead any homeowner planning to sell their Lewes home this year to hold off for the moment…at least until Punxutawney Phil’s forecast starts to come true (the venerable groundhog said that winter 2016 will be a short one). A quick peek at Lewes’s listings in most Februarys usually confirms the notion that most people decide to wait. As a rule, the ranks of the Lewes listings in February are a good deal thinner than will be the case a few months later.
Delaying isn’t necessarily the most convenient answer for every homeowner—which gives rise to questioning whether that particular piece of common sense is always as sensible as it seems. At least one writer thinks not.
Just over a year ago, Kenneth Harney authored an account describing some contrary evidence. Writing in The Washington Post, he reported on national sales results “that suggest it’s not necessarily the case” that spring or early summer are the most favorable times to launch listings. In fact, a winter launch (this year, from December 22 through March 20) can prove “surprisingly advantageous.”
The most compelling evidence for that claim comes from an online brokerage firm whose two-year study of asking and selling prices led it to conclude that listings launched in December through March actually yielded the best chance of resulting in above-asking price sales: 17%! The evidence was similar for those hoping to sell quickly. Listings debuting in February turned out to be champs: an average 66% of February listings sold within 90 days, making it “historically the best month to list.”
We might be led to believe that these are reasons enough to hurry up and rush to enter the Lewes listings immediately. Of course not all by itself—but for properties already in showable condition, it might be a reason to consider it. Logically, leaner Lewes listings mean less competition. Since it’s common for those whose homes did not move last summer to withdraw them until the spring, homeowners who list before then stand to get a jump on the market. And yes, since many corporations tend to transfer employees and hire new ones early in the year, some of those newcomers will have found their new Lewes homes before the spring real estate rush begins.
Harney’s article does ultimately undermine the notion that correctly choosing a good listing month automatically guarantees a quick sale at a higher-than-asking price. The giveaway comes from one quoted source who mentions that owners of properties that hadn’t attracted serious offers during the warmer months “get more realistic at this time of year.” This therefore makes winter also a good time for “smart shoppers.” My experience with my own clients (all of whom are definitely smart shoppers) suggests they seldom are itching to make higher-than-asking offers—certainly not right off the bat. The inescapable truth is that, like most other factors, the results garnered by any Lewes listing depend on a whole galaxy of factors in addition to the season.
If your own plans include listing or house hunting any time this year, I hope you’ll give me a call. I’ll be delighted to provide you with my totally confidential, no-obligation consultation, including an up-to-the-moment Lewes market situation report. Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.