Archive for the ‘Listing prices’ Category

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What is a Housing Bubble? Is One Forming?

July 7, 2015

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The recent talk of Greece and its financial challenges has some questioning whether the U.S. could also return to the crisis we experienced in 2008. Some are looking at the rise in real estate values and wondering whether we are in the middle of another housing price bubble.

What actually is a price bubble?

Here is the definition according to Jack M. Guttentag, Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania:

“A price bubble is a rise in price based on the expectation that the price will rise. Sooner or later something happens to erode confidence in continued price increases, at which point the bubble bursts and prices drop. What makes it a price bubble is that the cause of the price increase is an expectation that the price will increase, which sooner or later must reverse itself.”

Does Professor Guttentag believe we are in another housing bubble?

In a recent article, he explained:

“My view is that we are a long way from another house price bubble. Home buyers, lenders, investors and regulators now understand that a nationwide decline in house prices is possible — because we recently lived through one.”

What are home prices doing?

Though home values are continuing to appreciate, the acceleration of the increases has slowed to year-over-year numbers which reflect a healthy housing market. Here is a chart showing year-over-year appreciation since January of last year:

Case-Shiller

We can see that appreciation rates have dropped from double digit numbers to more normal rates of 5% or lower.

Bottom Line

We think Nick Timiraos of the Wall Street Journal put it best in a recent tweet:

“Predictions of a new national home price bubble look unfounded for now, according to data.”

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Homes Sales Up in Almost Every Price Range

June 15, 2015

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The National Association of Realtors’ most recent Existing Home Sales Report revealed that home sales were up rather dramatically over last year in five of the six price ranges they measure. Only those homes priced under $100,000 showed a decline (-10.1%). The decline in this price range points to the lower inventory of distressed properties available for sale and speaks to the strength of the market. Every other category showed a minimum increase of at least 9%, with sales in the $250,000- $500,000 range up 21.2%!
Here is the breakdown:

Sales-Up-STMWhat does that mean to you if you are selling?
Houses are definitely selling. If your house has been on the market for any length of time and has not yet sold, perhaps it is time to sit with your agent and see if it is priced appropriately to compete in today’s market.

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Show me the money…

May 15, 2011

If you have been reading my blogs then you would know this headline may be a bit misleading. It’s NOT really all about the money.

But when it does comes to money – people need to be smart. When I refer to people…I mean Sellers.

There used to be a thought process in selling real estate that the three things that mattered were PRICE, LOCATION and CONDITION. While it still remains true to some degree. I would argue that in our current market the ONLY thing that matters is PRICE.

The homes selling in the Central Florida area are priced right and priced to sell. That means short sales as well as non-distressed properties. In this market, your home has to be priced to compete. Sellers should understand why their home isn’t sold – it is most certainly going to come down to price. I have seen homes in the worst of condition that sell because they are priced to attract buyers. It is our job, as real estate sales educators to advise our clients accordingly. PRICE = SOLD.

Show them the money.

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There’s NO down time in a down market!

May 30, 2008

Down time is not something today’s luxury real estate agent should think about…there is NO down time. I read countless articles and all of them try to tell us they have the “secret” or the “magic pill” for solving our real estate woes. Well news flash: it’s a tough market but there is a cure! It’s just that the cure is a little hard to swallow…

LOWER YOUR LIST PRICE. In the immortal words of my mentor, Roger Soderstrom, “Price solves everything” and you know what…he’s right! It’s time to wake up and realize we aren’t in real estate from years past…this is real estate NOW and FUTURE. It’s not bad. Heck, it’s not really that tough. It’s just a true market correction and time for people to position their homes for sale by pricing them properly.

Tough times no! Tough price breaks, maybe. But there is still a world of opportunity for buyers AND SELLERS in today’s market.