At the beginning of the year, industry forecasts called for home price appreciation to slow to about half of the double-digit increase we saw last year. The thinking was that inventory would increase from record-low levels and put an end to the bidding wars that have driven home prices up over the past twelve months. However, that increase in inventory has yet to materialize. The National Association of Realtors (NAR) reports that there are currently 410,000 fewer single-family homes available for sale than there were at this time last year.
This has forced those who made appreciation forecasts this past January to amend those projections. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, the National Association of Realtors, and Zelman & Associates have all adjusted their numbers upward after reviewing first quarter housing data. Here are their original forecasts and their newly updated projections:Even with the increases, the updated projections still don’t reach the above 10% appreciation levels of 2020. However, a jump in the average projection from 5.3% to 7.7% after just one quarter is substantial. Demand will remain strong, so future appreciation will be determined by how quickly listing inventory makes its way to the market.
Bottom Line
Entering 2021, there was some speculation that we might see price appreciation slow dramatically this year. Today, experts believe that won’t be the case. Home values will remain strong throughout the year.
The question many homebuyers are facing this year is, “Why is it so hard to find a house?” We’re in the ultimate sellers’ market, which means real estate is ultra-competitive for buyers right now. The National Association of Realtors (NAR) notes homes are getting an average of 4.8 offers per sale, and that number keeps rising. Why? It’s because there are so few houses for sale.
Low inventory in the housing market isn’t new, but it’s becoming more challenging to navigate. Danielle Hale, Chief Economist at realtor.com, explains:
“The housing market is still relatively under supplied, and buyers can’t buy what’s not for sale. Relative to what we saw in 2017 to 2019, March 2021 was still roughly 117,000 new listings lower, adding to the pre-existing early-year gap of more than 200,000 fresh listings that would typically have come to market in January or February. Despite this week’s gain from a year ago, we’re 19 percent below the new seller activity that we saw in the same week in 2019.”
While many homeowners paused their plans to sell during the height of the pandemic, this isn’t the main cause of today’s huge gap between supply and demand. Sam Khater, Vice President and Chief Economist at Freddie Mac, Economic Housing and Research Division,shares:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes . . . That decline has resulted in the decrease in supply of entry-level single-family homes or, ’starter homes.’”
When you consider the number of homes built in the U.S. by decade, the serious lack of new construction is clear (See graph below):The number of newly built homes is disproportionately lower than the rate of household formation, which, according to the U.S. Census Bureau, has continued to increase. Khater also explains:
“Even before the COVID-19 pandemic and current recession, the housing market was facing a substantial supply shortage and that deficit has grown. In 2018, we estimated that there was a housing supply shortage of approximately 2.5 million units, meaning that the U.S. economy was about 2.5 million units below what was needed to match long-term demand. Using the same methodology, we estimate that the housing shortage increased to 3.8 million units by the end of 2020. A continued increase in a housing shortage is extremely unusual; typically in a recession, housing demand declines and supply rises, causing inventory to rise above the long-term trend.”
To catch up to current demand, Freddie Mac estimates we need to build almost four million homes. The good news is builders are working hard to get us there. The U.S. Census Bureau also states:
“Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,766,000. This is 2.7 percent (±1.7 percent) above the revised February rate of 1,720,000 . . . Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,739,000. This is 19.4 percent (±13.7 percent) above the revised February estimate of 1,457,000. . . .”
What does this mean? Lawrence Yun, Chief Economist at NAR, clarifies:
“The March figure of 1.74 million housing starts is the highest in 14 years. Both single-family units and multifamily units ramped up. After 13 straight years of underproduction – the chief cause for today’s inventory shortage – this construction boom needs to last for at least three years to make up for the part shortfall. As trade-up buyers purchase newly constructed homes, their prior homes will show up in MLSs, and hence, more choices for consumers. Housing starts to housing completion could be 4 to 8 months, so be patient with the improvement to inventory. In the meantime, construction workers deserve cheers.”
Bottom Line
If you’re planning to buy this year, the key to success will be patience, given today’s low inventory environment. Let’s connect today to talk more about what’s happening in our area.
Last week’s Existing Home Sales Report from the National Association of Realtors (NAR) shows sales have dropped by 3.7% compared to the month before. This is the second consecutive month that sales have slumped. Some see this as evidence that the red-hot real estate market may be cooling. However, there could also be a simple explanation as to why existing home sales have slowed – there aren’t enough homes to buy. There are currently 410,000 fewer single-family homes available for sale than there were at this time last year.
Lawrence Yun, Chief Economist at NAR, explains in the report:
“The sales for March would have been measurably higher, had there been more inventory. Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”
Yun’s insight was supported the next day when the Census Bureau released its Monthly New Residential Sales Report. It shows that newly constructed home sales are up 20.7% over the previous month.
Buyer demand remains strong. With more of the adult population becoming vaccinated and job creation data showing encouraging signs, existing-home inventory is expected to grow in the coming months.
What will this mean for home sales going forward?
Fannie Mae, Freddie Mac, and the Mortgage Bankers Association (MBA) have all forecasted that total home sales (existing homes and new construction) will continue their momentum both this year and next. Here’s a graph showing those projections:
Bottom Line
Living through a pandemic has caused many to re-evaluate the importance of a home and the value of homeownership. The residential real estate market will benefit from both as we move forward.
Homeowners ready to make a move are definitely in a great position to sell today. Housing inventory is incredibly low, driving up buyer competition. This gives homeowners leverage to sell for the best possible terms, and it’s fueling a steady rise in home prices.
In such a hot market, houses are selling quickly. According to the National Association of Realtors (NAR), homes are typically on the market for just 18 short days. Despite the speed and opportunity for sellers, there are still steps you can take to prep your house to shine so you get the greatest possible return.
1. Make Buyers Feel at Home
One of the ways to make this happen is to take time to declutter. Pack away any personal items like pictures, awards, and sentimental belongings. The more neutral and tidy the space, the easier it is for a buyer to picture themselves living there. According to the 2021 Profile of Home Staging by NAR:
“82% of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home.”
Not only will your house potentially attract the attention of more buyers and likely sell quickly, but the same report also notes:
“Eighteen percent of sellers’ agents said home staging increased the dollar value of a residence between 6% and 10%.”
As Jessica Lautz, Vice President of Demographics and Behavior Insights for NAR, says:
“Staging a home helps consumers see the full potential of a given space or property…It features the home in its best light and helps would-be buyers envision its various possibilities.”
2. Keep It Clean
On top of making an effort to declutter, it’s important to keep your house neat and clean. Before a buyer stops by, be sure to pick up toys, make the beds, and wash the dishes. This is one more way to reduce the number of things that can distract a buyer from the appeal of the home.
Ensure your home smells fresh and clean as well. Buyers will remember the smell of your house, and according to the same report from NAR, the kitchen is one of the most important rooms of the house to focus on if you want to attract more buyers.
3. Give Buyers Access
Buyers are less likely to make an offer on your house if they aren’t able to easily schedule a time to check it out. If your home is available anytime, that opens up more opportunities for multiple buyers to go from curious to eager. It also allows buyers on tight schedules to still get in to see your house.
While health continues to be a great concern throughout the country, it’s important to work with your agent to find the best safety measures and digital practices for your listing. This will drive visibility and create access options that also keep everyone in the process safe.
4. Price It Right
Even in a sellers’ market, it’s crucial to set your house at the right price to maximize selling potential. Pricing your house too high is actually a detriment to the sale. The goal is to drive high attention from competing buyers and let bidding wars push the final sales price up.
Work with your trusted real estate professional to determine the best list price for your house. Having an expert on your side in this process is truly essential.
Bottom Line
If you want to sell on your terms, in the least amount of time, and for the best price, today’s market sets the stage to make that happen. Let’s connect today to determine the best ways to maximize the sale of your house this year.
The summer season is coming soon, and the real estate market is already heating up quickly. If you are looking to buy or sell a home, there are things you need to know about this competitive market. Here is what you can expect from the real estate market this summer.
Buying Real Estate
The recent pandemic slowed down homebuyer activity last year. Now that vaccines are becoming available, there has been rapid growth in home prices with a low inventory of houses in the real estate market. This can create fierce competition in suburban and medium-sized metro areas. Interest rates are expected to be relatively low.
Selling Real Estate
The summer this year is a seller’s real estate market. If you are considering relocation, this season is an ideal time to do it. During the summer, you may be able to get more for your home than you could in any other season. It is important that you do your research as you may be competing with other sellers. You may want to speak with a real estate agent to determine how housing activity and pricing are faring where you live.
New Real Estate Construction and Development
With a high demand for home buying, new construction and development in the real estate market may see a significant rise. According to the Census Bureau, there were 1,68 million authorized building permits for privately-owned housing units. Summer’s arrival creates ideal real estate construction conditions. The number of homebuyers will still outweigh the number of available homes.
Voila Real Estate Services
Summer is the best time to participate in the real estate market, whether you are buying or selling a home. Our Voila real estate savvy fanatics open the doors in the real estate landscape, challenging the old and standardizing the new. When you work with us, you call the shots. Flat listing fees and new wave technology contribute to our friction-free experience, helping you streamline the process and get the best deal possible. Whether you are looking to put your home on the market this summer or need Green Photos to showcase your home for a fall/winter listing, call us today to see how we can help.
Don’t be impressed by the headlines reporting year-over-year housing numbers for the next several months (data covering March, April, May, and June). The data will most likely show eye-popping one-year increases.
While the year-over-year jumps will certainly be striking, consumers should take these numbers with a grain of salt, as the situation highlights a short-term quirk in the reporting of this data. Essentially, the increases will reflect a combination of two things: sharply lower housing numbers during last year’s virus-related market collapse and the subsequent strong rebound. This will result in what will appear to be unbelievable growth.
Let’s use single-family home sales as an example:As the graph reveals, last spring’s buying market was anything but typical. Instead of sales increasing, they fell sharply as a result of stay-at-home orders that virtually shut the real estate industry down.
This spring’s real estate market will bounce back with more normal seasonal sales increases. The percentage increase in sales will be astronomical – not because sales have skyrocketed, but instead because they will be compared to last year’s low numbers.
Bottom Line
There are likely to be some sensational headlines about real estate over the coming months. However, don’t be fooled. The actual story is that the real estate market is finally back to normal.
This year, mortgage rates have started to slowly climb above recent record-breaking lows. Many homeowners planning to move may feel like they’ve missed the chance to score a great rate on their next mortgage. In reality, there’s still time to secure a rate far below the historic norm. Here’s why.
After creeping up for seven consecutive weeks, average mortgage rates have dropped more recently (See graph below). With rates taking a slight dip over the past two weeks at the same time the inventory of houses for sale is so low, homeowners today are sitting in the optimal seat to sell. What’s the advantage of selling your house now? Securing a low mortgage rate on your next home.To take advantage of today’s real estate market, experts are encouraging homeowners to act now before interest rates climb. Danielle Hale, Chief Economist at realtor.com, explains:
“…mortgage rates slid for a second week … but we don’t expect rates to stay at this level for too long.”
Hale continues to say:
“For sellers, getting in early optimizes odds of a quick sale at a good price before there’s too much competition, but that means acting now … In this environment, sellers probably really can’t go wrong, and that’s especially true in the nation’s hottest housing markets where homes are selling quickly and getting the greatest number of viewers online.”
Most experts agree that rates will continue to trend upward. Sam Khater, Chief Economist at Freddie Mac, states:
“Despite the pause in mortgage rates recently, we expect them to increase modestly for the remainder of this year.”
In addition, Freddie Mac recently released their Quarterly Forecast, which notes:
“We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.” (See graph below):
While buyers everywhere want to secure the lowest rate possible, it’s important to remember that today’s rates are still much lower than the historic norm. Odeta Kushi, Deputy Chief Economist at First American, emphasizes:
“While mortgage rates have trended up in recent months, they are still historically low, so relative to one year ago, housing actually is still more affordable and that’s really thanks to this low mortgage rate environment we find ourselves in.”
Bottom Line
If you’re thinking of moving, don’t miss the opportunity to score a great rate on your next home mortgage. Let’s connect today so you can get your house ready to sell and find your dream home while mortgage rates are still low.
The financial benefits of buying a home as compared to renting one are always up for debate. However, one element of the equation is often ignored – the ability to build wealth as a homeowner.
Most experts are calling for home prices to continue appreciating over the next several years. The most recent Home Price Expectation Survey, a survey of over one hundred economists, real estate experts, and investment and market strategists, expects home appreciation to increase as follows:
2021: 6%
2022: 4.5%
2023: 4%
2024: 3.6%
2025: 3.5%
Using their annual projections, the graph below shows the equity build-up a purchaser could earn, using a $350,000 home as an example:A homeowner could increase their net worth by over $80,000 in five years. That’s an average of $16,000 annually. That number should be in any equation determining the financial benefits of owning a home compared to renting.
Bottom Line
Homeowners are going to make a substantial amount of money in home equity over the next five years. If you’re ready to buy a home, let’s connect so you can enjoy this great benefit as well.
One of the biggest hurdles homebuyers face is saving for a down payment. As you’re budgeting and planning for your home purchase, you’ll want to understand how much you’ll need to put down and how long it will take you to get there. The process may actually move faster than you think.
Using data from the U.S. Department of Housing and Urban Development (HUD) and Apartment List, we can estimate how long it might take someone earning the median income and paying the median rent to save up for a down payment on a median-priced home. Since saving for a down payment can be a great time to practice budgeting for housing costs, this estimate also uses the concept that a household should not pay more than 28% of their total income on monthly housing expenses.
According to the data, the national average for the time it would take to save for a 10% down payment is right around two and a half years (2.53). Residents in Iowa can save for a down payment the fastest, doing so in just over one year (1.31). The map below illustrates this time (in years) for each state:
What if you only need to save 3%?
What if you’re able to take advantage of one of the 3% down payment programs available? It’s a common misconception that you need a 20% down payment to buy a home, but there are actually more affordable options and down payment assistance programs available, especially for first-time buyers. The reality is, saving for a 3% down payment may not take several years. In fact, it could take less than a year in most states, as shown in the map below:
Bottom Line
Wherever you are in the process of saving for a down payment, you may be closer to your dream home than you think. Let’s connect to explore the down payment options available in our area and how they support your plans.
As vaccines are administered and travel resumes, many of us are beginning to plan for those long-awaited vacations we missed out on over the past year. Some households are focusing their efforts on buying a vacation home rather than staying in a hotel, too. The National Association of Home Builders (NAHB) reports:
“Second homes (i.e., homes sold to buyers who are not going to occupy the home year-round, but use it as a vacation home, investment property, etc.) account for 15 percent of new single-family home sales.”
It’s not surprising that there’s an increase in demand for vacation homes. The majority of Americans are realizing they prefer to be around small groups, as shown in a recent survey from The Harris Poll:
“Social distancing taught consumers new things about how they like to socialize; (75%) said, ‘during COVID social distancing I realized I preferred smaller social gatherings at home or at friends’ place.’”
Not only are vacation homes seen as a potentially more pandemic-friendly way to travel and socialize, but they can also serve as an extended home-away-from-home. With more Americans being given the option to continue working remotely or retire earlier than expected, vacation homes can be used year-round. The NAHB explains:
“Remote work arrangements have made it possible for some wealthier Americans to move to alternate locations that are not just small, suburban shifts from within their current metro area. More fundamentally, second home demand may also be benefitting by an acceleration of retirement plans, as well as stock market gains.”
Bottom Line
The demand for vacation homes has increased and will continue to rise as we head into summer. If you own a house in a destination area and have thought about selling, now is a great time to take advantage of today’s high buyer interest. Let’s connect to discuss your opportunities in our local market.
My name is John Bendele and these are words to live by.
“What is the biggest challenge you are facing in life right now and how can I help?”
I believe when you are able to help others in their struggles, it will always bring a since of joy and accomplishment that is like no other. I enjoy bringing opportunities to people in real estate and in life. To be a lifting hand and a beacon of knowledge. It brings me great joy to guide and support others when making exciting and difficult choices. I have been a licensed realtor for over 7 years in Minnesota. Coming from a construction background, I will provide a wealth of knowledge about homes. Knowing homes allows me to a better negotiator with facts and details some may not. I enjoy working with sellers, investors and buyers.
I grew up in Southwest Texas and moved to Minnesota in 2015. I have lived in the White Bear Lake area until making a move over the lake to Willernie, MN where I now reside. I love spending quality time with my teenage boys who nicknamed me “JoJo”. My favorite things to do are being outdoors on or in the water, BBQing (TX style) and going on any adventure.
I want to bring knowledge, growth, excitement and wealth to the clients I encounter through being a realtor. I look forward to assisting you in your amazing journey in real estate.
Thank you,
John A Bendele
Meet Brittany
Brittany is a mama of three kiddos, a wife of a firefighter and added more love to her home with three dogs and two cats. Outside of the fun she has as an agent and her roles at home she enjoys doing any DIY projects she can get her hands on!
Brittany fell in love with the Real Estate gig in 2019. She grew up in Apple Valley, and now owns her childhood home. I guess you could say she is a south metro pro!
You!
Hey! If you’re looking for your next role as an agent let us know! This could be you!
Meet Shea Amundson
Hey, I’m Shea and I love helping people find a beautiful home that sets their soul on fire!
Meet Katie
Katie comes from the busy world of entertainment and being a Traveling Operations Manager. She transitioned to Real Estate back in 2018 and has been hooked ever since! Katie thrives on training, developing new systems, and helping agents grow! Katie joins Voila with the determination to help every agent and client make their dream a reality whether it be building their business or finding that dream home!
When Katie isn’t working, she is a full-time student at Metropolitan University. She enjoys cooking foods from all over the world, traveling, and has a habit of getting a new tattoo wherever she goes. She is huge into animal conservation and spending time with her dog Sawyer who often joins her on travels!
Meet Sarah Beth Lindstrom
Sarah wants to live in a world filled with innovative businesses daring enough to break the mold…monthly auto-shipments of Laffy Taffy’s, and lots and lots of laughter!!!
Having been in the real estate industry since 2005, her go to role has always been supporting her teams in any way that she can! She has gone from Listing and Transaction Management, to Team Manager, and now Director of Support! She is an ‘introverted extrovert’ that finds the, ‘behind the scenes’ with a hint of showing homes – to be a perfect blend.
When she’s not supporting her Voila Family, she is out getting one more rep in at the gym, finding new healthy recipes to attempt (and then trick her teenager into eating somehow), and enjoying quick road trips to…well, anywhere! She also plays on a competitive volleyball team in the winter, sand volleyball in the summer and softball in the spring and fall.
“Two things define you. The patience you have when you have nothing and the attitude when you have everything.”
Meet Jessi Andersen
In June of 2020 Jessi joined team of Voila…and…it’s that easy!
Ha! No really, it did all begin in June. New to this side of Real Estate, Jessi joined in hopes to take her chatty, outgoing self and bring some good of it! Her natural tendencies of networking and love of growth and goals, have been set in direction – expanding Voila!
Where is Jess when she isn’t nurturing the growth of Voila? Adventuring with her family outside in nature. Or perhaps baking up a new recipe while dancing the day away – and of course cheering for her little athletes at home, as well as the MN Vikings/Twins!
“In the end it is not the years in your life that count. It’s the life in your years” ~ Abe Lincoln
Meet Wyatt Lemon
Wyatt is a Real Estate Extraordinaire, and a Loving Husband, and a Lover of Life and a PAW-rent to 3 awesome dogs. Huge believer in the idea that life is what you make of it, so with that being said I guess you could say the glass is half full! Things I enjoy outside of work are Yoga, being a big time Foodie, and spending time with my family. I grew up in Hugo MN and have been a local resident my whole life. I studied Marketing at Century College as well as St. Cloud State University. I got into Real Estate in October of 2018 and have loved every minute of it!
Meet James Andersen
James Andersen is a human being who believes that the best in others is a reflection of the energy we bring.
Magnanimous behavior is the standard not the exception.
10+ years Army Career
5+ years Married
5+ years Father of Calendar Crushers
5+ years Real Estate Career
30+ years Life Experience
Let’s learn and grow together.
Meet Joey Torkildson
You are writing your own story in life! Is what you are doing right now supposed to be in that story? I hope so!
That’s why my goal is to always sign up, get uncomfortable, inspire through doing, shoot, then aim. We don’t have enough time on this planet to stay mundane and there are too many experiences to be doing one thing for too long! It’s all about the short term experiments!
Quick background: 19+ year US Army Master Sergeant vet; 10+ year transformer of lives through ownership (AKA: Realtor) ; 2+ year CEO of an Expansion Team with Hergenrother Realty Group ; Director of Agent Training with that same organization; Self employed for 12+ years; starting in late 2019 CoFounded a new disruptive real estate brokerage, Voila; Contagiously energetic teacher who loves helping people discover they can accomplish anything; Dad of two extremely crazy and loving boys; Husband of an amazingly supportive and ultimate gardener wife.
Let’s be curious explorers together! I love connecting with people and helping them achieve their goals and I’m a firm believer in the fact that you are one introduction away from your entire life changing!
Two quotes I live by: Amazing things rarely happen in your comfort zone and only those who attempt the absurd achieve the impossible!
Even with the increases, the updated projections still don’t reach the above 10% appreciation levels of 2020. However, a jump in the average projection from 5.3% to 7.7% after just one quarter is substantial. Demand will remain strong, so future appreciation will be determined by how quickly listing inventory makes its way to the market.
