NEW Flood Risk Data Available

New Flood Data Adds an Extra Dimension for Shoppers and for Research

September 1st, 2020 – Now, flood data, available on realtor.com® will enable buyers to consider the flood risk of a location when thinking about their home purchase.  The flood data includes an estimate of a home’s FEMA flood zone as well as Flood FactorTM, comprehensive flood risk data displayed at the property level in the form of a score, ranging from 1 (minimal risk) to 10 (extreme risk) powered by the First Street Foundation. When available for a property, it will display the current risk of flooding for the home; whether that risk is increasing, decreasing, or constant; and the likelihood of that property experiencing a flood event over the next 30 years. 

Previous research conducted by realtor.com® and featured in the Wall Street Journal found evidence that homes outside of FEMA high-risk flood zones appreciated faster than homes inside those zones between 2012 and 2017, suggesting that buyers already attempt to adjust for this risk. But most buyers are not deterred just because a home has flood risk.  In a consumer survey conducted this spring by Toluna research for realtor.com®, a majority of buyers (55 percent) would still buy a home even if they knew it was in a flood zone, but roughly four in 10 buyers would expect some kind of discount on the home, presumably for the extra costs associated with flood risk. Younger shoppers were more open to buying a home with flood risk than those aged 55 and older.

The shopping experience on realtor.com® will now make information about flood risk available to home buyers, homeowners, and real estate agents upfront. It will enable buyers to factor this risk into their evaluation of the tradeoffs of buying a particular home. The data will also help buyers and owners ensure they have adequate insurance coverage, since flood risks are not covered by homeowner’s insurance policies. By helping real estate agents make this risk an early part of the home search discussion, this data may incentivize owners to make improvements to their homes that help mitigate flood risk. This information may also reduce the likelihood that a home sale is derailed by unexpected information about flood risks late into the transaction.

In the future, this flood risk data will enable research to answer questions such as how a rating affects the price of a home or how long it takes to sell. We may also be able to evaluate whether the FEMA mapping or Flood FactorTM data have different impacts on market outcomes or consumer home shopping behavior.

For assistance in finding the right home or guidance in the real estate market, Talk To Tammy636.931.9100!

Waves of Homebuyers Hit the Housing Market Before Labor Day

25th August 2020 – The realtor.com Housing Market Recovery Index reached 104.8 nationwide for the week ending August 15, posting a 0.9 point decrease over last week and 4.8 points above the pre-COVID baseline. The ‘housing demand’ component remained above recovery, with this week’s index reaching 121.8, the second highest index value since March,
Locally, a total of 34 markets have crossed the recovery benchmark as of this week. The overall recovery index is showing greatest recovery in Las Vegas, Seattle, New York, Boston, and Philadelphia.

National Recovery Trends

Waves of home shoppers continue to drive the housing market recovery this summer, powering sales and putting a dent on inventory as back-to-school plans hang in the balance. The realtor.com Housing Market Recovery Index reached 104.8 nationwide for the week ending August 15, posting a 0.9 point decrease over last week and 4.8 points above the pre-COVID baseline. The slight drop in the overall index this week comes after visible and opposite changes to demand and supply components of growth.

The ‘housing demand’ component remained above recovery, with this week’s index reaching 121.8, the second highest index value since March, after posting a second consecutive weekly increase. In contrast, the ‘housing supply’ component declined back down to 97.5, after having surpassed the recovery threshold last week. New listings remain on the right trajectory but growth is still variable on a week to week basis, and consistent improvement will be key in the weeks to come.

With supply and demand moving in opposite directions, sellers are clearly gaining an upper hand as buyer competition builds up. While sellers are returning to the market, buyers are increasingly outnumbering them, causing overall levels of inventory to decline.

The pandemic has transformed the homebuying season to one that’s not dictated by the school calendar. In a typical year, online traffic peaks in July and begins to dwindle down in august as schools restart in the fall. This year, online traffic has continued to accelerate through August, as most of the country debates back-to-school plans. This bodes well for sellers in the next few weeks, as the usually quieter early fall season may see summer levels of activity.

Overall Housing Recovery Index 104.8 -0.9
Housing Demand Growth Index 121.8 +3.3
Listing Price Growth Index 106.5 +0.2
New Supply Growth Index 97.5 -4.2
Pace of Sales Index 104.7 +0.0

The ‘housing demand’ component – which tracks growth in online search activity – remained visibly above recovery, with this week’s index reaching 121.8, up 3.3 points over the prior week and 21.8 points above the January baseline. Homebuyer interest continues to outpace last year levels as detected on realtor.com over the last few months. While record-high prices, short supply and economic headwinds pose significant challenges, the pool of ready-to-transact buyers continues to grow.

Powered by a backlog of demand, the ‘home price’ component – which tracks growth in asking prices – increased by 0.2 points last week, and is now at 106.5, 6.5 points above the January baseline. With supply at record lows and buyer competition on the rise, sellers have regained leverage, enabling the fastest price growth recorded since January 2018. As inventory and foot traffic grow through the end of the summer, we’ll get a good indication of whether higher asking prices will translate into higher selling prices.

The ‘pace of sales’ component – which tracks differences in time-on-market – continues to remain above the pre-COVID baseline. The time-on-market index remained the same as last week, at104.7, 4.7 points above the January baseline, suggesting buyers and sellers are continuing to connect at a faster rate and setting up the peak homebuying season in August.

Notably, the ‘housing supply’ component – which tracks growth of new listings – declined to 97.5, down 3.3 points over the prior week, and 2.5 points below the January baseline. The temporary boost in new listings seen earlier came as the summer season replaced the typical spring homebuying season. More homes entered the market than typical for this time of the year, but further improvement could be limited going into the fall as the peak cycle subsides.

Local Recovery Trends

The Midwest Approaches the Recovery Threshold
Regionally, the West (112.7) continues to lead the pack in the recovery, with the overall index now visibly above the pre-COVID benchmark. The Northeast (107.4) and South (101.8) remain above recovery pace but conditions in the south declined slightly this week. The Midwest (99.7) continued to see slight improvements in market conditions.

Notably, it was primarily the ‘housing supply’ component which decreased the South’s overall score this week. The ‘housing supply’ component, measuring new listings, declined -3.4 points in the South, while all other components grew. While the Midwest and Northeast continued to see improved supply conditions, the West’s ‘housing supply’ component also declined, by 2.7 points, potentially indicating a small slip in seller confidence in the South and West this week.

Social distancing and economic resilience continue to be key factors driving local differences in the housing recovery. Per our earlier research, the spread of COVID-19 is closely linked to the housing slowdown, with markets with higher cases per capita more likely to see a bigger impact on supply and the pace of sales. The speed and sustainability of the reopening, and each market’s ability to contain COVID-19, are dictating the speed of recovery across the regions.

Finally, resilient economies may have an edge in the housing recovery, and areas with strong job markets before COVID-19, especially those with thriving tech sectors, are seeing buyers and sellers reconnect faster than the rest of the country. Are you ready to list your house? Talk To Tammy, 636.931.9100 

Existing-Home Sales Climb RECORD 20.7%

June 2020, Existing-home sales rebounded at a record pace in June, showing strong signs of a market turnaround after three straight months of sales declines caused by the ongoing pandemic, according to the National Association of Realtors®. Each of the four major regions achieved month-over-month growth, with the West experiencing the greatest sales recovery.

Total existing-home sales,1 https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 20.7% from May to a seasonally-adjusted annual rate of 4.72 million in June. Sales overall, however, dipped year-over-year, down 11.3% from a year ago (5.32 million in June 2019).

“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR’s chief economist. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”

The median existing-home price for all housing types in June was $295,300, up 3.5% from June 2019 ($285,400), as prices rose in every region. June’s national price increase marks 100 straight months of year-over-year gains.

Total housing inventory3 at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.

Yun explains that significantly low inventory was a problem even before the pandemic and says such circumstances can lead to inflated costs.

“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”

Yun’s concerns are underscored in NAR’s recently released 2020 Member Profile, in which Realtors® point to low inventory as being one of the top hindrances for potential buyers.

Properties typically remained on the market for 24 days in June, seasonally down from 26 days in May, and down from 27 days in June 2019. Sixty-two percent of homes sold in June 2020 were on the market for less than a month.

First-time buyers were responsible for 35% of sales in June, up from 34% in May 2020 and about equal to 35% in June 2019. NAR’s 2019 Profile of Home Buyers and Sellers – released in late 20194 – revealed that the annual share of first-time buyers was 33%.

Individual investors or second-home buyers, who account for many cash sales, purchased 9% of homes in June, down from 14% in May 2020 and 10% in June 2019. All-cash sales accounted for 16% of transactions in June, down from 17% in May 2020 and about equal to 16% in June 2019.

Distressed sales5 – foreclosures and short sales – represented 3% of sales in June, about even with May but up from 2% in June 2019.

“It’s inspiring to see Realtors® absorb the shock and unprecedented challenges of the virus-induced shutdowns and bounce back in this manner,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif. “NAR and our 1.4 million members will continue to tirelessly work to facilitate our nation’s economic recovery as we all adjust to this new normal.”

According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 3.16% in June, down from 3.23% in May. The average commitment rate across all of 2019 was 3.94%.

Single-family and Condo/Co-op Sales

Single-family home sales sat at a seasonally-adjusted annual rate of 4.28 million in June, up 19.9% from 3.57 million in May, and down 9.9% from one year ago. The median existing single-family home price was $298,600 in June, up 3.5% from June 2019.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 440,000 units in June, up 29.4% from May and down 22.8% from a year ago. The median existing condo price was $262,700 in June, an increase of 1.4% from a year ago.

“Homebuyers considering a move to the suburbs is a growing possibility after a decade of urban downtown revival,” Yun said. “Greater work-from-home options and flexibility will likely remain beyond the virus and any forthcoming vaccine.”

Regional Breakdown

In a complete reversal of the month prior, sales for June increased in every region. Median home prices grew in each of the four major regions from one year ago.

June 2020 existing-home sales in the Northeast rose 4.3%, recording an annual rate of 490,000, a 27.9% decrease from a year ago. The median price in the Northeast was $332,900, up 3.6% from June 2019.

Existing-home sales increased 11.1% in the Midwest to an annual rate of 1,100,000 in June, down 13.4% from a year ago. The median price in the Midwest was $236,900, a 3.2% increase from June 2019.

Existing-home sales in the South jumped 26.0% to an annual rate of 2.18 million in June, down 4.0% from the same time one year ago. The median price in the South was $258,500, a 4.4% increase from a year ago.

Existing-home sales in the West ascended 31.9% to an annual rate of 950,000 in June, a 13.6% decline from a year ago. The median price in the West was $432,600, up 5.4% from June 2019.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries. Talk To Tammy, and see what the best options are for you with selling your house or finding the right home. 636-931-9100, Tammy Fadler

More Homeowners Sprucing up their Gardens and Curb Appeal in the Time of Coronavirus

One positive thing that appears be to happening in the time of coronavirus sheltering /staying in place orders is that people are engaging in more home hobbies and creative activities that they may have not had time for before due to social activities. One can see a lot of articles about staying creative or why the quarantine can make one more creative.  One activity that Americans apparently have spent more time and money on is gardening, based on retail sales and employment data.  This is a good time for homeowners because gardening, yard improvements, and minor home renovation or simple do-it-yourself projects (deck) improve curbside appeal and reflect the kind of care and maintenance that homeowners put into their homes, both external and internal. Attractive gardens, a clean yard, freshly coated fences, mended pathways will make a home attractive to buyers, in the time of and after the coronavirus social distancing period.

Building materials/gardening store sales and employment are up compared to retail trade

Retail sales data from the U.S. Census Bureau showed that retail sales of building materials, garden equipment, and supply dealer stores (NAICS 444) increased 1% in March from February and was up 7% on a year-over-year basis. In comparison, retail sales and food services fell 9% on a month-over-month basis and 6% on a year-over-year basis.  Other industries that had higher sales in March were grocery stores (+27% m/m and +29% y/y); health and personal care stores (+4% m/m, +4% y/y), and general merchandise stores that includes department stores and other general merchandise stores (6% m/m, 7% y/y).

In 2019, Americans spent nearly $380 billion (retail sales) on building materials, garden equipment, and supplies. Building materials and supply stores (paint and wallpaper stores and hardware stores) sold $334 billion (so $41 billion is garden supplies).

While brick-and-mortar retail stores have shed about 300,000 jobs since January 2017, the employment in brick and mortar stores has remained relatively flat at 1.3 million. In March 2020, it is one of the few sectors that posted year-over-year employment gains, of 11,500 jobs. However, employment did fall by nearly 4,000 from February to March.

Impact of landscaping on home values

What’s the impact of projects that improve a home’s curb appeal on the likelihood of selling a home and home values? According to NAR’s 2018 Remodeling Impact Report: Outdoor Features,  “74% of REALTORS® suggested sellers complete a landscape maintenance program before attempting to sell, and 17 percent said the project most recently sealed a deal for them, resulting in a closed transaction.” The cost in 2018 was $3,000 and 100% was recovered when the home was sold.

Single-family detached homes with green spaces: part of the American dream

Since 2009, the prices of single-family homes have also picked up faster than condominiums, as low mortgage rates have made a home purchase more affordable, as well as due to difficulty obtaining individual-unit mortgage financing in condominium projects that are not FHA-approved.1 As of March 2020, the median sales price of single-detached as $282,500, or nearly $20,000 more than the median sales price of condominiums/coops of $263,400.  Since January 2012, the median sales price of single-family detached homes has increased by 83% compared to 70% for condominiums/coops. The higher price of single-family homes reflects the preference of buyers for these homes, perhaps because the house with the picket fence and green yard embodies the attainment of the American dream of homeownership.

We can help you sell your house or support you finding a new home,

Talk To Tammy: 636-931-9100 or contact us via tammy@talktotammy.com

Historic low mortgage rates + Open Houses are back!

In consideration of member demand generated from state and local guidelines being adjusted to allow business to start reopening, MARIS has made the Open House capability available once again – meaning, we get to plan and host Open House events again.

Also, Mortgage rates reached a new record low last week, with the 30-year fixed-rate mortgage falling to its lowest average ever since Freddie Mac began tracking such data in 1971. “The size and depth of the secondary mortgage market is helping to keep rates at record lows,” says Sam Khater, Freddie Mac’s chief economist. “These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April. While many people are benefiting from low mortgage rates, it’s important to remember not all people are able to take advantage of them given the current pandemic.”

The Federal Home Loan Mortgage Corporation “Freddie Mac” reported the following national averages with mortgage rates for the week ending April 30:

  • 30-year fixed-rate mortgages: averaged 3.23%, with an average 0.7 point, falling from last week’s 3.33% average. The previous all-time low for the 30-year mortgage was 3.29%, set during the week ending March 5. A year ago, 30-year rates averaged 4.14%.
  • 15-year fixed-rate mortgage: averaged 2.77%, with an average 0.6 point, falling from a 2.86% average. A year ago, 15-year rates averaged 3.60%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.14%, with an average 0.4 point, dropping from a 3.28% average. A year ago, 5-year ARMs averaged 3.68%.

Freddie Mac reports average commitment rates, along with average fees and points, to reflect the total upfront cost of obtaining a mortgage.

If you have questions about selling your house or need help finding a new home, talk to Tammy!

Call: 636-931-9100