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What It Means To Be in a Sellers' Market


 

If you’ve given even a casual thought to selling your house in the near future, this is the time to really think seriously about making a move. Here’s why this season is the ultimate sellers’ market and the optimal time to make sure your house is available for buyers who are looking for homes to purchase.

The latest Existing Home Sales Report from The National Association of Realtors (NAR) shows the inventory of houses for sale is still astonishingly low, sitting at just a 2-month supply at the current sales pace.

Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market in which there are enough homes available for active buyers (See graph below):What It Means To Be in a Sellers Market | MyKCM

When the supply of houses for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. As a result, competition among purchasers rises and more bidding wars take place, making it essential for buyers to submit very attractive offers.

As this happens, home prices rise and sellers are in the best position to negotiate deals that meet their ideal terms. If you put your house on the market while so few homes are available to buy, it will likely get a lot of attention from hopeful buyers.

Today, there are many buyers who are ready, willing, and able to purchase a home. Low mortgage rates and a year filled with unique changes have prompted buyers to think differently about where they live – and they’re taking action. The supply of homes for sale is not keeping up with this high demand, making now the optimal time to sell your house.

Bottom Line

Home prices are appreciating in today’s sellers’ market. Making your home available over the coming weeks will give you the most exposure to buyers who will actively compete against each other to purchase it.

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16 Grand Street, Reading, MA 01867 For Sale!

Located in the heart of Reading’s coveted library district. Just minutes to downtown area shops, restaurants and library. Commuting is a breeze with highways nearby and Reading Station down the street! 16 Grand Street is a sun-filled colonial with many updated and recent renovations. The inviting farmers porch welcomes you into an expansive foyer leading to the living room with gas fireplace and built-in bookshelves. The light and bright kitchen opens to dining room for effortless entertaining and boasts quartz counters, SS appliances, and gas range. 1/2 bath with laundry completes the first floor.  Wide staircase leads to second floor with three bedrooms and renovated full bathroom. The flat, private backyard is perfect for games and play, and includes a deck, bluestone patio and fire pit for those summer nights. Many updates since 2014 including newer roof and gas heat.  Truly a joy to live in and a special place to call home!

Get all the details about this home here!

Click here for Virtual Tour!

Full brochure here!

 

 

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North of Boston Real Estate Market Update March 2021

“It’s never been easier to sell your home. However, we are shocked at how many sellers are leaving tens of thousands of dollars and sometimes six figures on the table by hiring agents who either don’t know how, or aren’t committed to, doing the work necessary to maximize a sale,” reports Linda O’Koniewski, CEO, Leading Edge. “If you want an agent who will squeeze out every dollar, make sure your agent has a plan to get all qualified buyers into a house, and then is savvy enough to negotiate on your behalf to create the best offer. Too many agents are simply messengers, not skilled negotiators who understand how to leverage each offer. Strategies matter, and that is what we specialize in at Leading Edge.”

Curious about the numbers for your area?  Click the link for your town!

AndoverNorth AndoverNorth ReadingReadingWakefield and Stoneham

Be sure to like us on Facebook and follow us on Instagram for a behind the scenes of our day to day and favorite happenings north of Boston!

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5 Reasons to Sell Your House This Spring

5 Reasons to Sell Your House This Spring | MyKCM
 

Michelle and I never push or pull our clients as when to sell their home and typically our advice is to move when “ you are ready.”  We are in a market that many people would argue will be the best seller's market of our life time. There are some compelling reasons below and for some people it simply makes sense to cash out. 

When selling a house, most homeowners hope for a quick and profitable transaction that puts them in a position to make a great move. If you’re waiting for the best time to win as a seller, the market is calling your name this spring. Here are five reasons why this is the perfect time to sell your house if you’re ready.  

1. There’s high demand from homebuyers.

Buyer demand is strong right now, and buyers are active in the market. ShowingTime, which tracks the average number of buyer showings on residential properties, recently announced that buyer showings are up 51.5% compared to this time last year. Daniil Cherkasskiy, Chief Analytics Officer at ShowingTime, notes:

“As anticipated, demand for real estate remains elevated and continues to be affected by low levels of inventory…On average, each home is getting 50 percent or more requests this year compared to January of last year. As we head into the busy season, it’s likely we’ll push into even more extreme territory until the supply starts catching up with demand.”

When your house is positioned to get a ton of attention from competitive buyers, you’re in the best spot possible as the seller.

2. There aren’t enough houses for sale.

Purchaser demand is so high, the market is running out of available houses for sale. Recently, realtor.com reported:

“Nationally, the inventory of homes for sale in February decreased by 48.6% over the past year, a higher rate of decline compared to the 42.6% drop in January. This amounted to 496,000 fewer homes for sale compared to February of last year.”

The National Association of Realtors (NAR) also reveals that, while home sales are skyrocketing, the inventory of existing homes for sale is continuing to drop dramatically. Houses are essentially selling as fast as they’re hitting the market – in fact, NAR reports that the average house is on the market for only 21 days.

It’s this imbalance between high buyer demand and a low supply of houses for sale that gives sellers such an advantage. A seller will always negotiate the best deal when demand is high and supply is low. That’s exactly what’s happening in the real estate market today.

3. You have a lot of leverage in today’s market.

Clearly, many more people are interested in buying than selling this spring, creating the ultimate sellers’ market. When this happens, homeowners in a position to sell have the upper hand in negotiations.

According to NAR, agents are reporting an average of 3.7 offers per house and an increase in bidding wars. As a seller, this means the ball is in your court – so much so that you can use your leverage to negotiate the best possible contract. Demand is there, and now is the perfect time to sell for the most favorable terms.

4. It’s a great way to use your home equity.

According to the latest data from CoreLogic, as of the third quarter of 2020, the average homeowner gained $17,000 in equity over the past year, and that number continues to grow as home values appreciate. Equity is a type of forced savings that grows during your time as a homeowner and can be put toward bigger goals like buying your next dream home.

Mark Fleming, Chief Economist at First American, notes:

“As homeowners gain equity in their homes, they are more likely to consider using that equity to purchase a larger or more attractive home – the wealth effect of rising equity. In today’s housing market, fast rising demand against the limited supply of homes for sale has resulted in continued house price appreciation.”

5. It’s a chance to find a home that meets your needs.

So much has changed over the past year, including what many of us need in a home. Spending extra time where we currently live is enabling many of us to re-evaluate homeownership and what we find most important in a home.

Whether it’s a house that has the features suited to working remotely, space for virtual or hybrid schooling, a home gym or theater, or something else, selling this spring gives you a chance to make a move and find the home of your dreams.

Bottom Line

Today’s housing market belongs to the sellers If you’ve considered making a move but have been waiting for the right market conditions, your wait may be over. Let’s connect so you’ll be positioned to win when you sell your house this spring.

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How Smart Is It to Buy a Home Today?

How Smart Is It to Buy a Home Today? | MyKCM
 

Whether you’re buying your first home or selling your current house, if your needs are changing and you think you need to move, the decision can be complicated. You may have to take personal or professional considerations into account, and only you can judge what impact those factors should have on your desire to move.

However, there’s one category that provides a simple answer. When deciding to buy now or wait until next year, the financial aspect of the purchase is easy to evaluate. You just need to ask yourself two questions:

  1. Do I think home values will be higher a year from now?
  2. Do I think mortgage rates will be higher a year from now?

From a purely financial standpoint, if the answer is ‘yes’ to either question, you should strongly consider buying now. If the answer to both questions is ‘yes,’ you should definitely buy now.

Nobody can guarantee what home values or mortgage rates will be by the end of this year. The experts, however, seem certain the answer to both questions above is a resounding ‘yes.’ Mortgage rates are expected to rise and home values are expected to appreciate rather nicely.

What does this mean to you?

Let’s look at how waiting would impact your financial situation. Here are the assumptions made for this example:

  • The experts are right - mortgage rates will be 3.18% at the end of the year
  • The experts are right - home values will appreciate by 5.9%
  • You want to buy a home valued at $350,000 today
  • You decide on a 10% down payment

How Smart Is It to Buy a Home Today? | MyKCM

Here’s the financial impact of waiting:

  • You pay an extra $20,650 for the house
  • You need an additional $2,065 for a down payment
  • You pay an extra $116/month in your mortgage payment ($1,392 additional per year)
  • You don’t gain the $20,650 increase in wealth through equity build-up

Bottom Line

There are many things to consider when buying a home. However, from a purely financial aspect, if you find a home that meets your needs, buying now makes much more sense than buying next year.

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North of Boston Real Estate Market February 14-20, 2021

We're taking a look at the north of Boston real estate market specifically Middlesex and Essex counties for single-family homes and condominiums during the week of February 14th through the 20th. Last week we had 1,307 homes available on the market just a slight decrease of 1% from the week before.  We had 485 new homes come on the market last week an increase of 11% from the week before. 460 homes went pending last week that is a slight decrease of 2% from the week before and overall 35% of the market did get absorbed through pending listings which again shows it remains a red-hot seller's market.

Now even though some people are saying that this is the best seller's market in our lifetime, there are plenty of people out there that are stuck on the sidelines because buying a home is extremely difficult in today's market. Contingencies simply don't work and even if your home has an accepted offer the likelihood of getting an offer accepted with that contingency is very difficult.  Traditionally there's been two options when buying and selling a home one being able to get financing of buying a home while not needing to sell your current home. Some people simply can't have that option other people sometimes will sell their home first find temporary housing and then move and again for some people that's not an option either.  There is finally a third option where you can buy a home without a contingency and remain in your current home.  If you're considering a move but are concerned about the obstacles out there we can discuss all three.  I can be reached at 617-275-3379.

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    For Sale! 38 Grey Coach Lane, Reading, MA 01867

    Welcome to one of Reading’s most premier locations, Grey Coach Lane! This stately Dutch Colonial proudly sits on a corner lot and offers a layout that is both spacious & practical. The eat-in kitchen is sun-filled with an island for friends to mingle. The generous dining room creates a background ideal for large holiday gatherings. The essential home office is tucked away on the 1st floor.  Anchored by the stone fireplace & with its airy cathedral ceilings, the great room certainly lives up to its name!  Upstairs, the master bedroom comes complete w/ tiled master bath including both jacuzzi tub & shower. Comfortable rec room w/ half bath located in the basement. The walk up attic offers so much potential for additional living space!  Hardwood  throughout, central air & recent updates including a Buderus Boiler. If you're searching for a home to invest in with the ability to personalize & add additional equity, here is your opportunity, with a location that will support it.

    Contact us at 617-275-3379 to learn more about 38 Grey Coach Lane, Reading, MA 01867!

    Click here for details plus a virtual tour of this home!

    See the full video tour below!

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    Community Spotlight The Children's Piazza, Peabody, MA

    Winter with little ones can be tough in the Northeast.  Our Digital Marketing Manager, Liz, recently discovered the perfect indoor play space for her and her little one.  The Children's Piazza is a play cafe located in Peabody, MA.  It's clean, spacious and has a variety of fun rooms, toys and art supplies for a morning or afternoon of play.  Another great feature is the cafe!  Weary-eyed parents and caregivers and purchase coffee and other drinks to sip while their children play.  Their cookies and egg bites are a must try as well!  They also have a fun outdoor area, Liz can't wait to check out this spring!

    The Children's Piazza is offering a $25 gift card to one lucky winner check out our Facebook and Instagram pages for details!

    Watch the video below to learn more about The Children's Piazza in Peabody, MA

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    North of Boston Real Estate Market Update February 2021

    We're taking a look at January of 2021 and comparing it to January of 2020 in the real estate market north of Boston specifically Middlesex and Essex counties for single-family homes, multi-family homes and condominiums.  Right now inventory levels are really low they are down by about 36% compared to last January. The time it's taking homes to sell, days on market, is also down by about 30% compared to last January. The amount of homes sold is up by about 10% from last January and median prices are up by about 7.2%.  For sellers out there that are selling now they're certainly cashing in, with low inventory and high demand, it remains a seller's market. For buyers wondering where they can escape the competition of other buyers, unfortunately we're seeing multiple offer situations in all price points from north of Boston, Middlesex and Essex counties all the way into southern New Hampshire.  If you're thinking about a move over the next 24 months and have questions, feel free to give us a call we'd be happy to give some information we can be reached at 617-275-3379.

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    3 Reasons We're Definitely Not in a Housing Bubble

    3 Reasons Were Definitely Not in a Housing Bubble | MyKCM
     

    Home values appreciated by about ten percent in 2020, and they’re forecast to appreciate by about five percent this year. This has some voicing concern that we may be in another housing bubble like the one we experienced a little over a decade ago. Here are three reasons why this market is totally different.

    1. This time, housing supply is extremely limited

    The price of any market item is determined by supply and demand. If supply is high and demand is low, prices normally decrease. If supply is low and demand is high, prices naturally increase.

    In real estate, supply and demand are measured in “months’ supply of inventory,” which is based on the number of current homes for sale compared to the number of buyers in the market. The normal months’ supply of inventory for the market is about 6 months. Anything above that defines a buyers’ market, indicating prices will soften. Anything below that defines a sellers’ market in which prices normally appreciate.

    Between 2006 and 2008, the months’ supply of inventory increased from just over 5 months to 11 months. The months’ supply was over 7 months in twenty-seven of those thirty-six months, yet home values continued to rise.

    Months’ inventory has been under 5 months for the last 3 years, under 4 for thirteen of the last fourteen months, under 3 for the last six months, and currently stands at 1.9 months – a historic low.

    Remember, if supply is low and demand is high, prices naturally increase.

    2. This time, housing demand is real

    During the housing boom in the mid-2000s, there was what Robert Schiller, a fellow at the Yale School of Management's International Center for Finance, called “irrational exuberance.” The definition of the term is, “unfounded market optimism that lacks a real foundation of fundamental valuation, but instead rests on psychological factors.” Without considering historic market trends, people got caught up in the frenzy and bought houses based on an unrealistic belief that housing values would continue to escalate.

    The mortgage industry fed into this craziness by making mortgage money available to just about anyone, as shown in the Mortgage Credit Availability Index (MCAI) published by the Mortgage Bankers Association. The higher the index, the easier it is to get a mortgage; the lower the index, the more difficult it is to obtain one. Prior to the housing boom, the index stood just below 400. In 2006, the index hit an all-time high of over 868. Again, just about anyone could get a mortgage. Today, the index stands at 122.5, which is well below even the pre-boom level.

    In the current real estate market, demand is real, not fabricated. Millennials, the largest generation in the country, have come of age to marry and have children, which are two major drivers for homeownership. The health crisis is also challenging every household to redefine the meaning of “home” and to re-evaluate whether their current home meets that new definition. This desire to own, coupled with historically low mortgage rates, makes purchasing a home today a strong, sound financial decision. Therefore, today’s demand is very real.

    Remember, if supply is low and demand is high, prices naturally increase.

    3. This time, households have plenty of equity

    Again, during the housing boom, it wasn’t just purchasers who got caught up in the frenzy. Existing homeowners started using their homes like ATM machines. There was a wave of cash-out refinances, which enabled homeowners to leverage the equity in their homes. From 2005 through 2007, Americans pulled out $824 billion dollars in equity. That left many homeowners with little or no equity in their homes at a critical time. As prices began to drop, some homeowners found themselves in a negative equity situation where the mortgage was higher than the value of their home. Many defaulted on their payments, which led to an avalanche of foreclosures.

    Today, the banks and the American people have shown they learned a valuable lesson from the housing crisis a little over a decade ago. Cash-out refinance volume over the last three years was less than a third of what it was compared to the 3 years leading up to the crash.

    This conservative approach has created levels of equity never seen before. According to Census Bureau data, over 38% of owner-occupied housing units are owned ‘free and clear’ (without any mortgage). Also, ATTOM Data Solutions just released their fourth quarter 2020 U.S. Home Equity Report, which revealed:

    “17.8 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value…The count of equity-rich properties in the fourth quarter of 2020 represented 30.2 percent, or about one in three, of the 59 million mortgaged homes in the United States.”

    If we combine the 38% of homes that are owned free and clear with the 18.7% of all homes that have at least 50% equity (30.2% of the remaining 62% with a mortgage), we realize that 56.7% of all homes in this country have a minimum of 50% equity. That’s significantly better than the equity situation in 2008.

    Bottom Line

    This time, housing supply is at a historic low. Demand is real and rightly motivated. Even if there were to be a drop in prices, homeowners have enough equity to be able to weather a dip in home values. This is nothing like 2008. In fact, it’s the exact opposite.