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It’s Not Just About the Price of the Home

When most of us begin searching for a home, we naturally start by looking at the price. It’s important, however, to closely consider what else impacts the purchase. It’s not just the price of the house that matters, but the overall cost in the long run. Today, that’s largely impacted by low mortgage rates. Low rates are actually making homes more affordable now than at any time since 2016, and here’s why.

Today’s low rates are off-setting rising home prices because it’s less expensive to borrow money. In essence, purchasing a home while mortgage rates are this low may save you significantly over the life of your home loan.

Taking a look at the graph below with data sourced from the National Association of Realtors (NAR), the higher the bars rise, the more affordable homes are. The orange bars represent the period of time when homes were most affordable, but that’s also reflective of when the housing bubble burst. At that time, distressed properties, like foreclosures and short sales, dominated the market. That’s a drastically different environment than what we have in the housing market now.

The green bar represents today’s market. It shows that homes truly are more affordable than they have been in years, and much more so than they were in the normal market that led up to the housing crash. Low mortgage rates are a big differentiator driving this affordability.It’s Not Just About the Price of the Home | MyKCM

What are the experts saying about affordability?

Experts agree that this unique moment in time is making homes incredibly affordable for buyers.

Lawrence Yun, Chief Economist, NAR:

“Although housing prices have consistently moved higher, when the favorable mortgage rates are factored in, an overall home purchase was more affordable in 2020’s second quarter compared to one year ago.”

Bill Banfield, EVP of Capital Markets, Quicken Loans:

“No matter what you’re looking for, this is a great time to buy since the current low interest rates can stretch your spending power.

Mortgage News Daily:

“Those shopping for a home can afford 10 percent more home than they could have one year ago while keeping their monthly payment unchanged. This translates into nearly $32,000 more buying power. 

Forbes:

Homeowners are the clear winners. Low mortgage rates mean the cost of owning is at historically low levels and who gains all the benefits of strong house price appreciation? Homeowners.”

Bottom Line

When purchasing a home, it’s important to think about the overall cost, not just the price of the house. Homes on your wish list may be more affordable today than you think. Let’s connect to discuss how affordability plays a role in our local market, and your long-term homeownership goals.

May Sales and Why Days on Market (DOM) Matters

May was a stellar month for closings at NextHome SunRaye Realty! Not only do we take pride in working to ensure a streamlined transaction process whether our clients are buying or selling, but it’s our specialty to assist our Tampa Bay neighbors in selling their homes quickly while maximizing their investment. Here are some of our May sales that sold in record time on market:

 

 

Generally, it’s wise to consider every offer to purchase your home and avoid rushing into a contract with the first one that appears to check all the boxes. In the seller’s market that we find ourselves in today, it’s wise to give all potential buyers a chance to put their best foot forward when competing for the sales contract on your home. A multiple offer situation is what every seller wishes for. This is very possible when a home is competitively priced. However, the amount of days your home spends on market matters as well, and it’s the reason why you want to partner with an experienced and knowledgeable real estate professional when marketing your home for sale. Here’s why the days on market statistic is important to home sellers, home buyers, and both the listing and buyer’s agents:

  • The days on market (DOM) statistic is an indicator of local market activity. It reflects the length of time on the market before a home sells. It can vary from zip code to zip code, neighborhood to neighborhood, and from one price range to another. This information can assist a home owner in planning their sale and determining how much time they will need to find a buyer and close on the sale.
  • The DOM statistic is a good reference for gauging the state of the real estate market. When days on market increase beyond what is typical, it is a good sign that it is a buyer’s market. This is because when homes stay on the market longer, there is more inventory for a buyer to choose from. During times like these, it is wise for the home owner who needs a faster sale to price his home more aggressively. When homes sell faster and there is a shortage of inventory, home owners may find more flexibility in their original pricing.
  • The truth is, the longer a home sits on the market, the harder it becomes to sell. When a home remains on the market for longer than it should when considering the market activity taking place around it, it becomes what is known as a “stale listing”. Stale listings can set off a couple of red flags for buyers, and it generally can mean one of a couple of different things. A stale listing may indicate that the home is not competitively priced. If the original list price is too high and scares interested buyers away, a price reduction will usually follow to generate more interest. While this may work, it may also backfire and suggest desperation on the seller’s part, giving potential buyers a more confident negotiating stance. Other times, a stale listing may indicate to potential buyers that there is something structurally wrong with the home or that it needs significant repairs that are preventing it from selling. Neither of these impressions will help the home owner sell his home, which is why it’s very important to price the home competitively while reflecting its value accurately from the start.

When you partner with NextHome SunRaye Realty and list your home for sale, your agent will review a market analysis with you that provides data on the all of the current active listings in your neighborhood, the listings that are under contract, closed sales, and expired listings. This analysis will offer you a complete picture of the local market activity currently taking place in your area and around your home. Your agent will tell you about our successful marketing programs that can assist you in selling your home quickly and at a competitive price. NextHome SunRaye agents are  continuously monitoring market statistics and staying on top of neighborhood trends in order to best serve our clients. Call NextHome SunRaye today to discuss a marketing strategy for selling your home and making it stand out above the rest: (727) 343-8600.

Homeowners are in the Best Position to Sell in Today’s Tampa Bay Real Estate Market, but the Time to Act is Now.

 

Surging home prices are making the news again, as the Tampa Bay Times reported on the biggest price increase in a year for the Tampa Bay area just last week. The reason? Rising values are due to the lack of homes for sale in the area’s inventory. With a lopsided market of too many buyers and not enough homes to buy, even homes that normally fall within an affordable range of $100,000 to $400,000 are seeing moderate price growth. However, while prices are rising, Pinellas and Hillsborough counties have seen a decline in sales, simply because the supply of homes to buy is so low. Here are some market facts to put it all in perspective, as reported by the Times:

 

  • Pasco County leads with a 17.2% surge in single family homes from a year ago, with a median price of $219,220. Hernando County follows in second place, up almost 12% to $164,000, Pinellas County is up 10%, to $244,250, and Hillsborough County is up 6.3% with a median price of $239,090.
  • Statewide, prices of single family homes increased 3.3% in February to a median of $246,500. Sales rose 6.9%.
  • Nationally, sales of existing homes (including condos, townhomes and houses) increased 5.4% from a year ago, with the median price rising to $241,700, a jump of almost 6%.

 

For the Tampa Bay area, however, there’s a little more to the inventory shortage than meets the eye. Not all homeowners are sitting on the sidelines waiting for the best moment to put the For Sale sign up in the yard, it’s institutional investors that have purchased thousands of Tampa Bay area homes during the foreclosure crisis. They have been renting out the homes ever since and aren’t selling. This presents a prime selling opportunity for the individual homeowner with a home that falls within that affordable range.

 

Florida Realtors reported these metro area median price percentage increases for the month of February:

  • Tampa-St. Petersburg-Clearwater $228,000 8.6%
  • Cape Coral-Fort Myers $250,223 2.1%
  • Jacksonville $241,500 10.8%
  • Lakeland-Winter Haven $188,500 12.5%
  • Miami-Fort Lauderdale-West Palm Beach $336,000 6.7%
  • Naples $491,000 15.9%
  • Orlando-Kissimmee $255,000 13.3%
  • North Port-Sarasota $286,995 4.7%

 

Now is the time to sell! If you are interested in learning what your home is valued at, give us a call at NextHome SunRaye Realty, and we can tell you exactly what it’s worth, answer all of your questions, and provide you with the best strategy for selling in this market. Get the best knowledge, expertise, and leadership at NextHome SunRaye.