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First-Time Buyers Are Searching for Existing Homes This Year

In the latest Housing Trends Report, the National Association of Home Builders (NAHB) measured the share of adults planning to buy a home over the next 12 months. The report indicates the percentage of all buyers that will be first-time buyers looking to purchase a home grew from 58% in Q4 2018 to 63% in Q4 2019.

The results revealed,

“Millennials are the most likely generation to be making plans to purchase a home within a year (19%), followed by Gen Z (13%) and Gen X (12%)…Prospective buyers in the youngest two generations are primarily first-time buyers: 88% of Gen Z buyers and 78% of Millennial buyers are reaching out to homeownership for the first time in their lives.”

AFFORDABLE DAYTONA BEACH HOMES FOR SALE

With high demand from first-time homebuyers and a shortage of inventory in the current market, selling your existing home this year might be your best move. Why? Because when homebuyers begin their search, they’re not all looking for new construction. Many are eager to find a little charm and character in a place to call home – possibly yours.

In fact, according to the same study, there is a

The #1 Reason It Is Difficult to Find Your Dream Home

The headlines in real estate today all revolve around one major point: there is a shortage of homes available for sale. Price appreciation is accelerating again because there is a shortage of homes available for sale. First-time buyers are taking longer to purchase a home because there is a shortage of homes available for sale in the lower price points. Boomers are staying in their current homes longer because there is a shortage of homes available for sale to which they would move. In certain markets, affordability is becoming more challenging because there is a shortage of homes available for sale.

What’s the major reason for this lack of housing inventory?

The issue was examined in a recent article by the National Home Builders Association (NAHB). In the article, Robert Dietz, Chief Economist for NAHB, explained:

“Home building in the 2010s was a story of the Long Recovery. After the Great Recession, the number of home builders declined significantly, and housing production was unable to meet buyer demand…Years of population and household formation growth, combined with relatively reduced levels of home building, have left the market with a critical supply shortage.”

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Here are the single-family home construction starts by decade for the last six decades:

The #1 Reason It Is Difficult to Find Your Dream Home | Simplifying The Market

Obviously, there’s a current shortage of homes for sale because not enough houses were built over the last ten years. To add to the challenge, the U.S. population expanded by more than 20 million people during the 2010s.

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Below is a graph showing the number of starts per every million in population. The last decade shows that starts per population were less than half the average of the previous five decades.

There’s good news coming!

The NAHB article explains that there is light at the end of the tunnel.

How confident home builders are in the housing market is a great indicator of how much building is about to get started. The NAHB/Wells Fargo Housing Market Index (HMI) gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as “good” than “poor.”

Here are the HMI readings going back to 2008:The 2019 confidence reading of 76 was the highest since 1999. The January 2020 index came in one point lower at 75. These readings indicate we should see an increase in new residential construction in 2020. Just last week, NAHB Chairman Greg Ugalde stated:

“Low interest rates and a healthy labor market combined with a need for additional inventory are setting the stage for further home building gains in 2020.”

The increase in housing starts has already begun. According to the January report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, single‐family housing starts were up 11.2% and attained the highest level in thirteen years.

Bottom Line

Whether you’re a first-time buyer or a seller thinking of moving up or down, 2020 could be your year with more new construction homes coming to market.

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The 2 Surprising Things Homebuyers Really Want

In a market where current inventory is low, it’s normal to think buyers might be willing to give up a few desirable features in their home search in order to make finding a house a little easier. Don’t be fooled, though – there’s still an interest in the market for some key upgrades. Here’s a look at the two surprising things buyers seem to be searching for in today’s market, and how they’re impacting new home builds.

Homebuyers Are Not Giving Up Their Garages

The National Association of Home Builders (NAHB) recently released an article showing the percentage of new single-family homes completed in 2018. The data reveals,

64% of new homes offer a 2-car garage
21% have a garage large enough to hold 3 or more cars
7% have a 1-car garage
7% do not include a garage or carport
1% have a carport

The following map represents this breakdown by region:Evidently, a garage is something homebuyers are looking for in their searches, but that’s not all.

Homebuyers Are Not Giving Up Their Patios

Patios are on the radar for buyers as well. Community areas are often common amenities in new neighborhoods, but as it turns out, private outdoor spaces are quite desirable too. NAHB also found that,

“Of the roughly 876,000 single-family homes started in 2018, 59.4% came with patios…This is the highest the number has been since NAHB began tracking the series in 2005.”

As shown in the graph below, the number of new homes built with patios has been increasing for the past 9 years. Clearly, they’re a desirable feature for new homeowners too.

Bottom Line

Homebuyers are looking for garage space and outdoor patio living. If you’re a homeowner thinking of selling a house with these amenities, it appears buyers are willing to spring for those key features. Let’s get together today to determine the current value and demand for your home.

Where Homebuyers Are Heading By Generation [INFOGRAPHIC]

Some Highlights:

Whether capitalizing on job opportunities, affordability, or warm-weather places to retire, Americans are making moves to these top cities to take advantage of the strength in the current housing market.
A strong economy and lower mortgage rates have made it easier for many would-be buyers to get into the market. According to realtor.com, it just depends on which market.
To find the top market in our area, let’s get together.

Housing Inventory Vanishing: What Is the Impact on You?

The real estate market is expected to do very well this year as mortgage rates remain at historic lows. One challenge to the housing industry is the lack of homes available for sale. Last week, move.com released a report showing that 2020 is beginning with the lowest available housing inventory in two years. The report explains:

“Last month saw the largest year-over-year decline of housing inventory in almost three years with a dramatic 12 percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018.”

The report also revealed that the decline in inventory stretches across all price points, as shown in the following graph:George Ratiu, Senior Economist at realtor.com, explains how this drop in available homes for sale comes at a time when more buyers are expected to enter the market:

“The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30-years of age in 2020, a prime age for many to purchase their first home. The significant inventory drop…is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”

The question is: What does this mean to you?

If You’re a Buyer…

Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be ready to make a competitive offer from the start, and understand that a shortage in inventory could lead to the resurgence of bidding wars. Calculate just how far you’re willing to go to secure a home, if you truly love it.

If You’re a Seller…

Realize that, in some ways, you’re in the driver’s seat. When there is a shortage of an item at the same time there is a strong demand for that item, the seller of that item is in a good position to negotiate. Whether it is price, moving date, possible repairs, or anything else, you’ll be able to demand more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.

Bottom Line

The housing market will remain strong throughout 2020. Understand what that means to you, whether you’re buying, selling, or doing both.

National Cut Your Energy Costs Day [INFOGRAPHIC]

Some Highlights:

On January 10^th of each year, “National Cut Your Energy Costs Day” encourages consumers to reduce their overall energy costs by improving home efficiency.
According to Freddie Mac, a typical U.S. family spends $2,200 per year on energy bills. By making energy efficient upgrades, you could reduce your energy bills by up to 30%.
To assess the energy efficiency of your home and see how it measures up, take a moment to check out Home Energy Yardstick to calculate your estimated opportunity. Don’t forget to have your energy bills nearby!

There’s a Long Line of Buyers Waiting for Your House

If you’re following what’s happening in the housing market right now, you know that many people believe the winter months aren’t a good time to sell a home.

As realtor.com Senior Economist George Ratiu recently noted,

“Sellers tend to be more reluctant to list during the colder time of year when the market typically makes a seasonal slowdown.”

However, a recent report by ShowingTime reveals how this year is different. Buyer activity is way up compared to the same time last year. The report explains,

“The nation’s 12.6% growth in home showings compared to 2018 was the most significant jump in buyer traffic during the current four-month streak of year-over-year increases. The West Region saw the greatest growth in activity, with a 23.1% jump – the region’s greatest in the history of the Showing Index.”

Continue reading…

The New Spring Real Estate Market is Here. Are You Ready?

Which month do you think most people who are considering buying a home actually start their search? If you’re like most of us, you probably think the surge happens in the spring, likely in April. Not anymore. According to new research, January 2019 was only 1% behind February for the most monthly views per listing on realtor.com.

So, what does that mean? The busiest season in real estate has just begun.

The same research indicates,

“Historically, April launched the kickoff of the home shopping season as buyers would come out of their winter hibernation looking for their new home. However, the spring shopping season now starts in January for many of the nation’s largest markets.”

With the reality of fewer homes on the market in the winter, and that supply naturally increases as we head to the spring market, waiting for more competition to list in your neighborhood this year might put you behind the curve. Perhaps now is the time to jump into the market.

George Ratiu, Senior Economist at realtor.com says,

“As shoppers modify their strategies for navigating a housing market that has become more competitive due to rising prices and low inventory, the search for a home is beginning earlier and earlier.”

There is a lot of speculation in the market about why the search for a home is shifting to an earlier start. The one thing we do know is if you’re thinking about buying or selling a home this year, the earlier you get started, the better.

Reminder: When should you sell something? When there is less of that item for sale and the greatest number of buyers are in the market. That’s exactly what is happening in real estate right now.

Bottom Line

The new spring market for real estate is underway. If you’re considering buying or selling, let’s connect, so you have the advantage in this competitive market.

Top Renovations for Maximum ROI [INFOGRAPHIC]

Top Renovations for Maximum ROI [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

If you’re planning on selling your house in 2020, these are the top renovations that will give you the highest Return on your Investment.
Regardless of how long you’re planning on staying in your current home, it’s smart to be aware of which home renovations add the most value.
The exterior of a house is the first thing buyers see when searching for a home. Upgrading your roof or siding will ensure your home leaves a great first impression!

The 2020 Real Estate Projections That May Surprise You

This will be an interesting year for residential real estate. With a presidential election taking place this fall and talk of a possible recession occurring before the end of the year, predicting what will happen in the 2020 U.S. housing market can be challenging. As a result, taking a look at the combined projections from the most trusted entities in the industry when it comes to mortgage rates, home sales, and home prices is incredibly valuable – and they may surprise you.

Mortgage Rates

Projections from the experts at the National Association of Realtors (NAR), the Mortgage Bankers Association (MBA), Fannie Mae, and Freddie Mac all forecast mortgage rates remaining stable throughout 2020:Since rates have remained under 5% for the last decade, we may not fully realize the opportunity we have right now.

Here are the average mortgage interest rates over the last several decades:

1970s: 8.86%
1980s: 12.70%
1990s: 8.12%
2000s: 6.29%

Home Sales

Three of the four expert groups noted above also predict an increase in home sales in 2020, and the fourth sees the transaction number remaining stable: The 2020 Real Estate Projections That May Surprise You | Simplifying The Market

With mortgage rates remaining near all-time lows, demand should not be a challenge. The lack of available inventory, however, may moderate the increase in sales.

Home Prices

Below are the projections from six different expert entities that look closely at home values: CoreLogic, Fannie Mae, Ivy Zelman’s “Z Report”, the National Association of Realtors (NAR), Freddie Mac, and the Mortgage Bankers Association (MBA).Each group has home values continuing to improve through 2020, with four of them seeing price appreciation increasing at a greater pace than it did in 2019.

Is a Recession Possible?

In early 2019, a large percentage of economists began predicting a recession may occur in 2020. In addition, a recent survey of potential home purchasers showed that over 50% agreed it would occur this year. The economy, however, remained strong in the fourth quarter, and that has caused many to rethink the possibility.

For example, Goldman Sachs, in their 2020 U.S. Outlook, explained:

“Markets sounded the recession alarm this year, and the average forecaster now sees a 33% chance of recession over the next year. In contrast, our new recession model suggests just a 20% probability. Despite the record age of the expansion, the usual late-cycle problems—inflationary overheating and financial imbalances—do not look threatening.”

Bottom Line

Mortgage rates are projected to remain under 4%, causing sales to increase in 2020. With growing demand and a limited supply of inventory, prices will continue to appreciate, while the threat of an impending recession seems to be softening. It looks like 2020 may be a solid year for the real estate market.

First-Time Buyers Are Searching for Existing Homes This Year

The #1 Reason It Is Difficult to Find Your Dream Home

What’s the major reason for this lack of housing inventory?

There’s good news coming!

Bottom Line

Most Recent MLS Listings Today

Check out some of these most popular home searches here at Daytona Beach Property Search

SEARCH ALL HOMES IN THE GREATER DAYTONA BEACH AREA HERE

The 2 Surprising Things Homebuyers Really Want

Homebuyers Are Not Giving Up Their Garages

Homebuyers Are Not Giving Up Their Patios

Bottom Line

Where Homebuyers Are Heading By Generation [INFOGRAPHIC]

Some Highlights:

Housing Inventory Vanishing: What Is the Impact on You?

If You’re a Buyer…

If You’re a Seller…

Bottom Line

National Cut Your Energy Costs Day [INFOGRAPHIC]

Some Highlights:

There’s a Long Line of Buyers Waiting for Your House

The New Spring Real Estate Market is Here. Are You Ready?

Bottom Line

Top Renovations for Maximum ROI [INFOGRAPHIC]

Some Highlights:

The 2020 Real Estate Projections That May Surprise You

Mortgage Rates

Home Sales

Home Prices

Is a Recession Possible?

Bottom Line

James Jestes, Your new favorite Realtor.

Daytona Beach Property Search By City

Contact James Today