8/31/2021 Bought a Single Family home in 2021 in Indianapolis, IN.
Local knowledge ***** Process expertise ***** Responsiveness ***** Negotiation skills *****
My husband and I would recommend Shawna to everyone! Before looking at houses, Shawna would have everything printed out for us about the house and for us to look at during the viewings. She answered all our questions and you can tell she truly has a passion for what she does. When we wanted to make a bid for a house, she helped us every step of the way for making the best offer that made the most sense. She helped us get our dream home and we are extremely thankful for her. She helped us feel at peace during this crazy market. Could not recommend Shawna enough. She is the realtor for you!
It’s economy 101 – when supply is low and demand is high, prices naturally rise. That’s what’s happening in today’s housing market. Home prices are appreciating at near-historic rates, and that’s creating some challenges when it comes to home appraisals.
In recent months, it’s become increasingly common for an appraisal to come in below the contract price on the house. Shawn Telford, Chief Appraiser for CoreLogic, explains it like this:
“Recently, we observed buyers paying prices above listing price and higher than the market data available to appraisers can support. This difference is known as ‘the appraisal gap . . . .’”
Why does an appraisal gap happen?
Basically, with the heightened buyer demand, purchasers are often willing to pay over asking to secure the home of their dreams. If you’ve ever toured a house you’ve fallen in love with, you understand. Once you start to picture yourself and your furniture in the rooms, you want to do everything you can to land the property, including putting in a high offer to try to beat out other would-be buyers.
When the appraiser comes in, they look at things a bit more objectively. Their job is to assess the inherent value of the home, so they’re going to study the facts. Dustin Harris, Appraiser Coach, drives this point home:
“It’s important for everyone to understand that the appraiser’s job in the end is to remain that unbiased third party, to truly tell the client what that home is worth in the current market, regardless of what decisions have been made on the price side of things.”
In simple terms, while homebuyers may be willing to pay more, appraisers are there to assess the market value of the home. Their goal is to make sure the lender isn’t loaning more money than the home is worth. It’s objective, rather than emotional.
In a highly competitive market like today’s, having a discrepancy between the two numbers isn’t unusual. Here’s a look at the increasing rate of appraisal gaps, according to data from CoreLogic (see graph below):
What does this mean for you?
Ultimately, knowledge is power. The best thing you can do is understand appraisal gaps may impact your transaction if you’re buying or selling. If you do encounter an appraisal below your contract price, know that in today’s sellers’ market, the most common approach is for the seller to ask the buyer to make up the difference in price. Buyers, be prepared to bring extra money to the table if you really want the home.
Above all else, lean on your real estate agent. Whether you’re a buyer or seller, your trusted advisor is your ally if you come up against an appraisal gap. We’ll help you understand your options and handle any additional negotiations that need to happen.
Bottom Line
In today’s real estate market, it’s important to stay informed on the latest trends. Let’s connect so you have an ally to help you navigate an appraisal gap to get the best possible outcome.
If you’re trying to decide whether or not to sell your house, this is the time to think seriously about making a move. Fannie Mae’s recent Home Purchase Sentiment Index (HPSI) reveals the number of respondents who say it’s a good time to sell is higher now than it was over the past few summers (see graph below). Today, the majority of consumers, 75 percent, say it’s a good time to sell a house.
Why is sellers sentiment up year-over-year?
The higher good time to sell sentiment has to do with today’s market conditions, specifically low housing supply and high buyer demand. In the simplest terms, we don’t have enough houses available for sale to meet buyer demand.
According to the latest data from the National Association of Realtors (NAR), we’re still firmly in a sellers’ market because housing supply is well below a balanced norm (shown in the graph below).Clearly, the scales are tipped in a seller’s favor today. But while housing supply is undeniably low, the right side of the graph shows how the inventory situation is improving little by little each month as more sellers list their homes for sale.
As a seller, that means each month, buyers have more options to pick from. By extension, that means your house may get less buyer attention with time. Danielle Hale, Chief Economist for realtor.com, explains it like this:
“More homeowners continue to list homes for sale compared to a year ago… Notably, while new listings continue to lag behind a more ‘normal’ 2019 pace, the gap is shrinking. Even though homes continue to sell quickly thanks to high demand and limited supply, new listings are subtly shifting the balance of market conditions in favor of buyers.”
So, what’s that mean for you?
If you’ve been waiting for the perfect time to sell, there may not be a better chance than right now. Inventory is gradually increasing each month, so selling sooner rather than later will help you maximize your home’s potential.
Bottom Line
If you’re planning to sell your house, 2021 is still the year to do it. The unique mix of low supply and high demand won’t last forever. Let’s connect to discuss what you need to do now to sell your house and take advantage of this sellers’ market.
08/09/2021 Bought A Condo home in 2021 in Indianapolis, IN.
Local knowledge ***** Process expertise ***** Responsiveness ***** Negotiation skills *****
We were referred to Shawna by a mutual friend. She acted as if she had known us for years and there was an instant mutual trust. She had 5 properties set up on the first day we met, and we purchased the very first one viewed! She was so easy to work with and we would genuinely call her a friend from here forward. She made the process supper easy, even though we were negotiating from 3hrs away!!
It was a very simple, professional, and fun experience to buy this property.
08/03/2021 Bought and Sold a Single Family home in 2021 in Fishers, IN.
Local knowledge ***** Process expertise ***** Responsiveness ***** Negotiation skills *****
Shawna was a joy. We worked over 3 years to find the perfect home. Shawna was very attentive to all my concerns. She was able to get me in on last minute showings. Our buyer’s agent loved doing business with her and that made our buying experience amazing. All aspects went smooth and efficient.
Fueled by a slight increase in housing inventory in some areas, central Indiana’s residential real estate market ended the summer on a strong note — with robust home sales and price increases.
Monthly real estate statistics from F.C. Tucker Company revealed that August’s pended home sales increased 3.5 percent compared to August 2020.
In addition, year-to-date home prices increased 13 percent, and available housing inventory decreased 15.2 percent compared to this time last year. The average August 2021 home sale price for the 16-county central Indiana region was $285,886, an increase of 10 percent.
Many of my friends, family, neighbors and clients, if they didn’t choose to move within the past 18 months, have chosen to invest in home improvements. Many times I’m asked if a particular improvement will have a solid rate of return when/if they sell in the near future.
Going into the fall months, I thought you would benefit from the below information. And please pass it on to a friend!
This is a general guideline. Neighborhoods and markets can vary in regard to the value of a particular improvement so if you’re considering any of the below and wonder if you’ll recoup your costs when you sell sometime in the future, give me a call!
I’m also NEVER too busy for your referrals so, please consider mentioning me during conversations about home buying, selling or building. I’m honored and grateful for your support!
Indianapolis Area Homes for Sale 