My Buyer & I had a lot of fun finding her first home. We’ve seen it all! That’s why we knew this was going to be perfect the minute we saw it. It was well loved but hadn’t received a lot of attention the last decade due to the owners age. The sellers agreed to not only help with closing costs for my buyer but they agreed to many crucial repairs such as a new roof, water heater, updated electrical & plumbing.
My buyer is thrilled she can move into a secure, updated home and start putting her touches on it!
If you’re in the process of looking for a home today, you know the supply of homes for sale is low because you’re feeling the impact of having a limited pool of options. And, if your biggest hurdle right now is that you’re having trouble finding something you like, don’t forget that a newly built home is a great option.
As a recent article from the National Association of Realtors (NAR) says:
“Home buyers continue to be met with limited housing options during what’s typically the real estate market’s busiest season. . . . The current supply of existing homes is about half the level it was in 2019 . . . Meanwhile, the market for new construction is a bright spot.”
Here’s a look at a key metric that shows just how much new home construction is ramping up nationwide. It’s called new residential completions. Basically, completions are newly built homes that are finished and ready to move into.
The graph below uses data from the Census to show the trend of new-home completions over time, including the long-term average for the number of finished housing units (shown in black on the graph):
As you can see on the left (shown in orange), leading up to the housing crash, builders exceeded that average. The result was an oversupply of homes on the market, so home values declined. That was one of the factors that led to the housing crash back in 2008.
Since then, the level of new home construction has fallen off, and builders haven’t built enough homes to meet the historical average (shown in red). That underbuilding left the housing market with a multi-year inventory deficit. And, that deficit is part of what makes inventory so low right now.
But, here’s the good news. The green on the right shows that according to the latest report from the Census, builders are matching the long-term average right now. And that means they’re bringing more newly built homes to the market than they have in recent memory.
And residential starts and permits are also gaining momentum. Starts are homes where the construction has officially kicked off. Permits are homes where builders are planning to break ground soon. Since both are up, it’s a sign there are even more newly built homes coming soon.
What This Means for You
More newly built homes in various stages of the construction process means your pool of options just got bigger. If you’re looking to move right now and timing is important to you, reach out to a local real estate professional to explore the homes that were recently completed in your area. If construction is done on those homes, you should be able to move in quickly.
But, if you can wait a bit and the idea of customizing a home from the ground up appeals to you, ask that same agent about the homes in your area that are in the process of being built. If you buy a home that’s still in the works, you can help pick the features and finishings along the way. And when none of the homes you’ve looked at so far are to your liking, being able to tailor one to your taste may be your best option.
Either way, a trusted real estate agent is a crucial part of the process. They’ll know exactly what’s available in your area and can base their recommendations on your unique needs, desired neighborhoods, and more.
Bottom Line
So, if you’re having trouble finding a home you like while inventory is so low, it may be time to consider looking into new-home construction. If you’d like to start that conversation, let’s connect so you’re working with an expert on what’s available in our area.
Shawna O’Brien, Executive Club F.C. Tucker Geist Fishers shawna.obrien@talktotucker.com 317-506-0039
When it comes to selling your house, you want three things: to sell it for the most money you can, to do it in a certain amount of time, and to do all of that with the fewest hassles. And, while the current housing market is generally favorable to sellers due to today’s limited housing supply, there are still factors that can cause delays or even prevent a house from selling.
If you’re having trouble getting your house to sell in today’s sellers’ market, here are a few things to think about.
Limited Access – If You Can’t Show It, You Can’t Sell It.
One of the biggest mistakes you can make as a seller is limiting the days and times when buyers can view your home. In any market, if you want to maximize the sale of your house, you can’t limit potential buyers’ ability to view it. Remember, minimal access equals minimal exposure.
In some cases, some of the most motivated buyers may come from outside of your local area. Because they’re traveling, they might not have the luxury to adjust their schedules when faced with limited options to tour your house, so make it available as much as possible.
Priced Too High – Price It To Sell, Not To Sit.
Pricing is a critical factor that can significantly impact your home sale. While it’s tempting to push the price higher to try to maximize your profit, overpricing can deter potential buyers and lead to your home sitting on the market longer.
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
Not to mention, buyers today have access to a number of tools and resources to view available homes in your area. If your house is priced unreasonably high compared to similar homes, it may drive potential buyers away. Listen to the feedback your agent is getting at open houses and showings. If the feedback is consistent, it may be time to re-evaluate and potentially lower the price.
Not Freshened Up Before Listing – If It Looks Good, It’ll Make a Good Impression.
When selling your house, the old saying “you never get a second chance to make a first impression” matters. Putting in the work on the exterior of your home is just as important as what you stage inside. Freshen up your landscaping to improve your home’s curb appeal so you can make an impact upfront. As an article from Investopediasays:
“Curb-appeal projects make the property look good as soon as prospective buyers arrive. While these projects may not add a considerable amount of monetary value, they will help your home sell faster—and you can do a lot of the work yourself to save money and time.”
But don’t let that stop at the front door. By removing personal items and reducing clutter inside, you give buyers more freedom to picture themselves in the home. Additionally, a new coat of paint or cleaning the floors can go a long way to freshening up a room.
For all of these things, lean on your real estate agent for expert advice based on your unique situation and feedback you get from buyers throughout the process.
Bottom Line
If your house isn’t getting the attention you feel it deserves and isn’t selling in the timeframe you wanted, it’s time to ask your trusted real estate agent for advice on what you may need to revisit or change in your approach. To get those expert insights, let’s connect.
Shawna O’Brien, Executive Club F.C. Tucker Geist Fishers shawna.obrien@talktotucker.com 317-506-0039
I hope your Summer is going well and I wish you a safe 4th of July week.
I recently saw a social media post of someone who was selling their house because they believe the market is going to crash and they wanted to capitalize on their equity. I’ve written and shared often in the past that there are many reasons why this housing market isn’t like the one we saw in 2008 (when I was working for the largest lender in the country, btw). One of which is how lending standards are different today.
“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is . . . a summary measure which indicates the availability of mortgage credit at a point in time.”
Basically, the index determines how easy it is to get a mortgage. Take a look at the graph below of the MCAI since they started keeping track of this data in 2004. It shows how lending standards have changed over time. It works like this:
When lending standards are less strict, it’s easier to get a mortgage, and the index (the green line in the graph) is higher.
When lending standards are stricter, it’s harder to get a mortgage, and the line representing the index is lower.
In 2004, the index was around 400. But, by 2006, it had gone up to over 850. Today, the story is quite different. Since the crash, the index went down because lending standards got tighter, so today it’s harder to get a mortgage.
Loose Lending Standards Contributed to the Housing Bubble
One of the main factors that contributed to the housing bubble was that lending standards were a lot less strict back then. In the early 2000s, it wasn’t exactly hard to snag a home mortgage. Many mortgages were given without borrowers proving their incomes and they actually couldn’t afford homeownership. Today, lenders impose higher standards and require borrowers to have excellent credit.
The tall peak in the graph above indicates that leading up to the housing crisis, it was much easier to get credit, and the requirements for getting a loan were far from strict. Back then, credit was widelyavailable, and the threshold for qualifying for a loan was low.
Lenders were approving loans without always going through a verification process to confirm if the borrower would likely be able to repay the loan. That means creditors were lending to more borrowers who had a higher risk of defaulting on their loans.
Today’s Loans Are Much Tougher To Get than Before
As mentioned, lending standards have changed a lot since then. Bankratedescribes the difference:
If you look back at the graph, you’ll notice after the peak around the time of the housing crash, the line representing the index went down dramatically and has stayed low since. In fact, the line is far below where standards were even in 2004 – and it’s getting lower. Joel Kan, VP and Deputy Chief Economist at MBA, provides the most recent update from May:
“Mortgage credit availability decreased for the third consecutive month . . . With the decline in availability, the MCAI is now at its lowest level since January 2013.”
The decreasing index suggests standards are getting much tougher – which makes it clear we’re far away from the extreme lending practices that contributed to the crash.
Bottom Line
Leading up to the housing crash, lending standards were much more relaxed with little evaluation done to measure a borrower’s potential to repay their loan. Today, standards are tighter, and the risk is reduced for both lenders and borrowers. This goes to show, these are two very different housing markets, and this market isn’t like the last time.
On a personal note, my family and I are headed to Nashville, TN for a few days to enjoy good music and time together.
Indianapolis Area Homes for Sale 