Richard Stein – Realtor®, Douglas Elliman, GREEN, SFR, CBR, eCertified®

Local Agent, Worldwide Marketing – Douglas Elliman Real Estate formerly Prudential Douglas Elliman Real Estate

Sellers Brace for Stiffer Competition as Buyers Retreat

A shift is occurring in many housing markets. Affordability may be prompting more potential buyers to pause due to rising mortgage rates over the last few weeks, and home sellers are now facing more competition. Homeowners may no longer be able to expect the quick sale they’ve seen their neighbors get in the past.

September Existing Home Sales

The number of For Sale signs is starting to increase across the country. Unsold inventory is at a 4.4-month supply at the current sales pace. Inventories were at 1.88 million in September, up slightly from 1.86 million a year ago, according to the National Association of REALTORS®’ latest housing report, released Friday.

“There is a clear shift in the market with another month of rising inventory on a year-over-year basis, though seasonal factors are leading to a third straight month of declining inventory,” says Lawrence Yun, NAR’s chief economist. “Homes will take a bit longer to sell compared to the super-heated fast pace that we saw earlier this year.”

Existing-home sales declined in September, with all four major regions of the country seeing no gains in sales activity last month, according to NAR’s report. Total existing home sales—completed transactions for single-family homes, townhomes, condos, and co-ops—dropped 3.4 percent in September compared to August, and are now at a seasonally adjusted annual rate of 5.15 million. Sales are down 4.1 percent from a year ago.

“This is the lowest existing home sale level since November 2015,” says Yun. “Decades-high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”

The 30-year fixed-rate mortgage has jumped from an average of 3.99 percent in 2017 to an average of 4.63 percent in September. Freddie Mac reported this week that rates are averaging 4.85 percent.

“Rising interest rates coupled with increasing home prices are keeping first-time buyers out of the market, but consistent job gains could allow more Americans to enter the market with a steady and measurable rise in inventory,” Yun says.

Here’s a closer look at some key housing indicators from NAR’s latest report:

  • Home prices: The median existing-home price for all housing types was $258,100 in September, a 4.2 percent increase compared to a year ago.
  • Days on the market: Forty-seven percent of homes sold in September were on the market for less than a month. Properties stayed on the market an average of 32 days in September, down from 34 days a year ago.
  • All-cash sales: All-cash transactions comprised 21 percent of real estate sales in September, up from 20 percent a year ago. Individual investors tend to make up the biggest bulk of cash sales. They purchased 13 percent of homes in September, down from 15 percent a year ago.
  • Distressed sales: Foreclosures and short sales made up 3 percent of sales in September, which is the lowest since NAR began tracking such data in October 2008. Broken out, 2 percent of sales in September were foreclosures and 1 percent were short sales.

Discover the Home’s Past the Seller Won’t Tell You

In the bewitching town of Salem, Mass., America’s original haunted city, we celebrate Halloween year-round. The site of the infamous Salem witch trials in the late 1600s, our rich history in the dark arts has become a tongue-in-cheek part of local life—even in real estate. Many homes here have spooky backstories or odd features that reflect the historic folklore of the area—like the one I recently toured during a broker’s open that had a hidden room reserved for black magic, complete with shrines and voodoo dolls. I’m no stranger to sensitively talking buyers and sellers through the sale of a home with bad juju.

Human Skull With Lemon And Candle On Table

© Jens Tandler – EyeEm/Getty Images

But stigmatized properties, no matter where they’re located, aren’t always obvious. You might expect a seller or listing agent to reveal details about a home’s past that are pertinent to the sale, but they’re not always required to do so. Most states require sellers to disclose physical property defects, but a stigma—an intangible, often psychological effect—is a bit more nebulous. Many states don’t require the disclosure of a stigma, so your buyers may never know the house they bought was, say, the scene of a violent, gruesome crime until they hear it second-hand from neighbors after moving in. That can leave your clients with a serious case of buyer’s remorse, feeling uncomfortable with the place they call home.

In Massachusetts, the burden is on buyers to ask the right questions when it comes to property stigmas; it is not on sellers to disclose. Wherever you live, it’s important to know your state’s disclosure laws and help your clients research properties they’re considering purchasing. After all, the devil you know is better than the devil you don’t know. Here are specific steps you can take.

  1.  

    Don’t wait for disclosure. Ask specifically about sketchy events in the past involving the property, including crime, past owners, and, yes, even paranormal activity. Sellers may not be required to volunteer this information in some states, but when asked about it, they must answer truthfully. Otherwise, they could be held legally liable.

  2. Ask for a disclosure form early in the transaction. Get all disclosures in writing, ideally before submitting an offer. Make sure the seller includes items that were revealed in the course of conversation, whether they’re legally required to be disclosed or not. This can help your buyers get a legal review of the disclosures and come to a decision about whether to move forward with a purchase before investing too much time.
  3. Search the property online. When Googling an address, make sure to look at the “news” tab of the search results for articles that may have been written about the home. Information about properties designated as historic landmarks—which often have eerie or unsavory pasts—may also be found at local preservation organizations. While you’re at it, check local police records for any criminal reports that may be concerning.
  4. Get the neighborhood gossip. Meet the next-door neighbors and ask about their impressions of the neighborhood. If the home your client wants to buy is known as a nuisance for any reason, the neighbors likely will offer up that information.

What If You Discover a Stigma?

Don’t automatically assume your buyer will no longer be interested in the property. Hauntings and other stigmas matter more to some than others. But even rumors of paranormal activity can make some buyers second-guess moving forward with a transaction. Your job is to inform your clients of everything you’ve learned about a home and let them come to their own purchase decision. You should, however, discuss adjusting the buyer’s expectations, contingency terms, and offer price once a stigma is discovered. Ultimately, your clients need to feel they’ve gotten a good deal if they’re going to share their space with ghostly guests.

Dana Bull, Sagan Harborside Sotheby’s International Realty

https://magazine.realtor/daily-news/2018/10/17/discover-the-home-s-past-the-seller-won-t-tell-you

U.S. Housing Construction Fell in September, Continuing Weak Stretch

Broader trend shows continued construction growth, as starts grew by 6.4% in the first nine months of 2018 compared with the same period a year earlier

Contractors build wall frames during construction of a new home in Walnut, Ill., in August.
Contractors build wall frames during construction of a new home in Walnut, Ill., in August.PHOTO: DANIEL ACKER/BLOOMBERG NEWS
 
By Sharon Nunn

WASHINGTON—Housing construction fell last month, continuing a weak stretch for the housing market driven by rising borrowing costs and expensive properties that are out of reach for most Americans.

Building declined 5.3% in September from the prior month, according to the Commerce Department’s latest housing report. Building permits, which can signal how much construction is in the pipeline, also fell. That stagnant construction is………………..

FULL STORY AT THE WALL STREET JOURNAL

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