Increases in Home Sales Expected in 2015

Stronger Economic Fundamentals Expected to Drive Increases in Home Sales, Housing Starts in 2015

Improvements in economic fundamentals, notably employment growth among millennials, will fuel significant increases in home sales and housing starts and a modest rise in home prices in 2015, according to CoreLogic‘s 2015 Housing Outlook released earlier this week.

Sam Khater, deputy chief economist for CoreLogic, predicted an increase of 9 percent in home sales and a 14 percent spike in housing starts for the coming year in the report.

“In 2014, the post-crisis economic expansion celebrated its fifth birthday and the main economic drivers of demand, such as consumption and capital investments, experienced steady improvement,” Khater said in the report. “Employment grew at an average of 2.0 percent on a year-over-year basis for the three months ending in November 2014, the strongest rate since the three months ending in March 2006, which was the peak employment growth of the last economic expansion.”

Employment grew at a rate higher than the national average (3 percent, as opposed to 2 percent) for the 25 to 29 age group, which is good news for housing, because this age group is the key first-time homebuyer segment. Steadily falling oil prices, which are down 45 percent since June, provide more economic growth tailwind going into next year. The drop in oil prices reduces energy-related expenses not just for driving, but for residential real estate also, according to Khater.

The stronger economic fundamentals are expected to drive an increase in demand for housing in 2015; sales are expected to jump by 9 percent, up to 5.8 million from the 5.3 million reported for 2014. Housing starts are expected to increase by 14 percent next year, up to 1.1 million. While the upturn in housing starts is healthy, it is still 23 percent below the average of 1.45 million for the last 50 years, Khater said.

Mortgage rates fell below 3.9 percent in December for the first time since May 2013 when a spike in rates caused a slowdown in home sales. The falling rates have not translated to lower prices, however, as price-to-income and price-to-rent ratios remain high. This means home price growth will be muted during the coming year, according to Khater. Mortgage rates are not expected to increase much in 2015 due to low inflation.

Khater said in the report that an analysis of the three main drivers of underwriting (debt-to-income ratios, loan-to-value ratios, and credit scores) revealed that purchase underwriting remains tight despite all the discussion in the last year around loosening the credit box.

“While there has been clarification on GSE loan put-backs and new low down payment products, the impact of both will be fairly modest because the weak originations market reflects not just a modestly tight supply of credit, but very weak demand,” Khater said.

Overall, the lower oil prices could play a key role in the recovery of the housing market and the economy overall. Lower oil prices have led to lower transportation and home energy costs, which not only save consumers money but increase consumer confidence, increasing the likelihood that they will spend money on big ticket items.

Seven New Year’s Pledges for Home Sellers

The New Year is a time for resolutions. If you’re thinking about selling your home in 2015, here are some resolutions that could help boost your chances of a quick sale.

Repeat to yourself: “I pledge to…”

1. “Avoid drastic design changes” – Unless you plan to turn your bold color palette into a more neutral one, then it’s best not to try and anticipate what buyers want in design and décor. The best approach to freshening up your home for sale is to simplify and depersonalize the look and feel so that potential buyers can picture building their own lives there. If you think repainting a bright purple wall, replacing an old toilet or buffing and restaining kitchen cabinets would help the home sell, by all means make these types of updates. Just be sure to keep your personal preferences in check. Your real estate agent can help you prioritize and remain objective.

2. “Stop neglecting the drippy faucet” – This applies to any repairs you might view as minor but actually could be a symptom of a larger system problem. Addressing things like plumbing leaks, poor ventilation and cracks in walls helps everyone avoid surprises from the inspection report and avoid the delay or even cancellation of a sale. When you have the information, you can either make the fixes or work with your agent to adjust pricing during negotiations with the buyer.

3. “Price my home reasonably” – It’s understandable to think your home is the best on the block and worth more than all the others – especially if you’ve invested in key upgrades and remodels. And, frankly, you might be right. But the only way to truly know is to consider recent sales of comparable homes in your area. Your real estate agent can provide you with the latest information and help you list at a competitive price that’s appropriate for your area and the local real estate climate.

4. “Make my home inviting” – This starts with creating curb appeal. The condition of your home’s exterior is a big part of getting buyers in the door. Maintaining the yard, sweeping the porch and driveway, replacing the tattered welcome mat, replacing missing house numbers, and removing clutter all are things that can help improve curb appeal.

5. “Thin out the clutter” – The best time for making tough decisions about what stays and what goes is BEFORE you put your home on the market. By the time the for-sale sign goes up, the home should be clutter free. You can either toss things you don’t want, sell these items, or move the more personal ones to storage. The types of items to remove include your prized knick-knack collection, clothes overflowing from the closets, and family photos. You want all closets and cupboards to appear as spacious as possible. When they’re jam-packed, it gives the impression that storage is limited even if that’s not the case.

6. “Clean like I’ve never cleaned before” – Think about under, behind, around and between. It’s easy to focus on cleaning the major surfaces, high-traffic areas, and areas that are visible. But what about the dust on top of the refrigerator? How about the slats in the window blinds? Have you cleaned the cabinets under the kitchen or bathroom sink recently? Did you notice the cobwebs behind the guest-room door? Look high and low for the dirt.

7. “Nail down my next step” – Don’t let your new plans and new place get lost in the shuffle of selling your old place. Determine where you’ll go next before your home goes up for sale. Are you prepared to move if your home sells quickly? Although it might not be typical, a quick sale is certainly possible. On the other hand, are you prepared if your home doesn’t sell quite so quickly? Be sure to talk with your real estate agent about your relocation needs and timeline.

If you’re planning on selling your home, please contact me.

Prompt, Efficient and Extremely Detail Orientated

I have known Randi for 30 years. She is prompt, efficient and extremely detail orientated. She is easy to work with and obviously loves what she does!   I would recommend her to family and friends to mark their homes SOLD.

—Walt, Owner
Champion Builder – since 1988

Get a Home Warranty for your Scottsdale Home

home_warranty_sWhat is a Home Warranty

Buying or selling your Scottsdale or Phoenix home can be stressful especially if one of your home’s system’s or appliances breaks down unexpectedly.

A home warranty is a service contract that covers repairs and the replacement of appliances and other systems in your Scottsdale or Phoenix home. It differs from your general homeowner’s policy which covers your home and its contents from hazards such as theft, loss and destruction.

Some of the appliances that are typically covered by most home warranties include: Heating Units, Water Heaters, Microwave Ovens, Ovens, Cooking Ranges, Dishwasher, Garbage Disposal, Plumbing and Electrical Wiring.

Usually only built-in appliances are routinely covered but by paying a little extra you can add AC Units, Washer and Dryer, Pool and Spa and Refrigerators.

Depending on the level of coverage that you purchase, annual premiums can be between 250$ and 600$ as well as a fee per incident. This fee covers the service contractor to come to your home and diagnose the problem.

A home warranty does not cover such things as permit fees, hauling fees nor cosmetic structures that are a part of an appliance like a rotisserie, baking attachments, refrigerator shelves, water filtering devices etc.

Considering the rising costs of appliance repairs and replacement a home warranty is a must. It will free you of the financial burden of expensive repairs and replacement parts. If you are purchasing a Scottsdale or Phoenix home, be sure negotiate with the seller to pay for a home warranty as a part of the contract for the first year. It will be the best house warming gift you ever get!

25 Things to do Before You List Your Home

First impressions have a major impact on potential buyers. Try to imagine what a potential buyer will see when they approach your house for the first time and tour each room. As your Realtor, I am happy to do a walk through and help my clients make a to do list of things they should do BEFORE their home is listed. It will help sell your home faster and give the buyers the impression that things are cared for and well maintained.

  1. Repair leaky faucets and freshly caulk the bathtubs and showers.
  2. Replace worn shower curtains.
  3. Make sure toilet seats look new and are firmly attached.
  4. Remove all clutter throughout the house. Organize and clean out closets and pantry.
  5. Make sure all kitchen appliances are clean and working.
  6. Shampoo carpeting or replace if worn. Clean tile floors and grout if dirty.
  7. Brighten the inside by painting walls, cleaning windows and removing sunscreens.
  8. If screens or windows are damaged, replace or repair them.
  9. Avoid any extension cords in plain view.
  10. If any doors stick or squeak, fix them.
  11. Repair or replace any loud ceiling fans.
  12. Repair or replace any broken knobs or handles on doors or cabinets.
  13. Make sure the door bell works properly and has a pleasant sound.
  14. Make your entry inviting. Buy a new welcome mat and clean, paint or re-stain front door.
  15. First impression is from the curb. Trim all bushes, pull weeds, mow grass and plant flowering plants for color.
  16. If there are any broken landscaping lights or bulbs missing fix or replace.
  17. Ensure all outside fixtures are clean and have working bulbs.
  18. Paint mailbox.
  19. Check stucco walls for cracks and discoloration.
  20. Inspect side gates and latches to be sure they work.
  21. Have the pool equipment checked. Make sure all is working properly and that the pool and spa are kept clean.
  22. Rearrange furniture to make rooms appear larger. Store any excess furniture.
  23. Remove some family photos. Less is more.
  24. Have Air Conditioning/Heating/Hot Water Heater inspected and change filters where necessary.
  25. Remove any oil or rust stains from the driveway and garage.

Good luck in getting your house ready to sell!