College Station and Bryan Local Market News

June 6, 2024

Mid-Year Market Update for 2024: What Buyers and Sellers Need to Know

 

Mid-Year Market Update for 2024: What Buyers and Sellers Need to Know

 

Last December, when the Federal Reserve projected a series of benchmark rate cuts in the coming year, some analysts speculated that mortgage rates—which had recently peaked near 8%—would fall closer to 6% by mid-2024.1,2,3 Unfortunately, persistent inflation has delayed the central bank’s timeline and kept the average 30-year mortgage rate hovering around 7% so far this year.2

 

While elevated mortgage rates have continued to dampen the pace of home sales and affordability, there have been some positive developments for frustrated homebuyers. Nationwide, the inventory shortage is starting to ease, and an uptick in starter homes coming on the market has helped to slow the median home price growth rate, presenting some relief to cash-strapped buyers.4

 

There are also signs that sellers are adjusting to the higher rate environment, as a growing number list their properties for sale.4 Still, economists say a persistent housing deficit—combined with tighter lending standards and historically high levels of home equity—will help keep the market stable.5

 

What does that mean for you? Read on for our take on this year's most important real estate news and get a sneak peek into what analysts predict is around the corner for 2024. 

 

MORTGAGE RATE CUTS WILL TAKE LONGER THAN EXPECTED

At its most recent meeting on May 1, the Federal Reserve announced that it would keep its overnight rate at a 23-year high in response to the latest, still-elevated inflation numbers.6

 

While mortgage rates aren’t directly tied to the federal funds rate, they do tend to move in tandem. So, while expected, the Fed’s announcement was further proof that a meaningful decline in mortgage rates—and a subsequent real estate market rebound—is farther off than many experts predicted.

 

“The housing market has always been interest rate sensitive. When rates go up, we tend to see less activity,” explained Realtor.com chief economist Danielle Hale in a recent article. “The housing market is even more rate sensitive now because many people are locked into low mortgage rates and because first-time buyers are really stretched by high prices and borrowing costs.”7

 

Many experts now speculate that the first benchmark rate cut will come no sooner than September, so homebuyers hoping for a cheaper mortgage will have to remain patient.

 

“We’re not likely to see mortgage rates decline significantly until after the Fed makes its first cut; and the longer it takes for that to happen, the less likely it is that we’ll see rates much below 6.5% by the end of the year,” predicted Rick Sharga, CEO at CJ Patrick Company, in a May interview.8

 

What does it mean for you?  Mortgage rates aren’t expected to fall significantly any time soon, but that doesn’t necessarily mean you should wait to buy a home. A drop in rates could lead to a spike in home prices if pent-up demand sends a flood of homebuyers back into the market. Reach out to schedule a free consultation so we can help you chart the best course for your home purchase or sale.

 

BUYERS ARE GAINING OPTIONS AS SELLERS RETURN TO THE MARKET

There is a silver lining for buyers who have struggled to find the right property: More Americans are sticking a for-sale in their yard.Given the record-low inventory levels of the past few years, this presents an opportunity for buyers to find a place they love—and potentially score a better deal.

 

In 2023, inventory remained scarce as homeowners who felt beholden to their existing mortgage rates delayed their plans to sell. However, a recent survey by Realtor.com shows that a growing number of those owners are ready to jump in off the sidelines.10

 

While the majority of potential sellers still report feeling “locked in” by their current mortgage, the share has declined slightly (79% now versus 82% in 2023). Additionally, nearly one-third of those “locked-in” owners say they need to sell soon for personal reasons, and the vast majority (86%) report that they’ve already been thinking about selling for more than a year.10 

 

Renewed optimism may also be playing a part. “Both our ‘good time to buy’ and ‘good time to sell’ measures continued their slow upward drift this month,” noted Fannie Mae Chief Economist Doug Duncan in an April statement.11

 

However, the current stock of available homes still falls short of pre-pandemic levels, according to economists at Realtor.com. “For the first four months of this year, the inventory of homes actively for sale was at its highest level since 2020. However, while inventory this April is much improved compared with the previous three years, it is still down 35.9% compared with typical 2017 to 2019 levels.”4

 

What does it mean for you?  If you’ve had trouble finding a home in the past, you may want to take another look. An increase in inventory, coupled with relatively low buyer competition, could make this an ideal time to make a move. Reach out if you’re ready to search for your next home.

 

If you’re hoping to sell this year, you may also want to act now. If inventory levels grow, it will become more challenging for your home to stand out. We can craft a plan to maximize your profits, starting with a professional assessment of your home’s current market value. Contact us to schedule a free consultation.

 

 

HOME PRICES ARE RISING AT A MORE MANAGEABLE PACE 

Homebuyers struggling with high borrowing costs have something else to celebrate. The national median home price has remained relatively stable over the past year, due to sellers bringing a greater share of smaller, more affordable homes to the market.4

 

In addition to offering cheaper homes, a recent survey found that home sellers are also adjusting their expectations when it comes to pricing. In many regions, just 12% anticipate a bidding war (down from 23% last year) and only 15% expect to sell above list price (versus 31% in 2023).10

 

But buyers shouldn’t expect a fire sale. According to Realtor.com’s April Housing Market Trends Report, “On an adjusted per-square-foot basis, the median list price grew by 3.8%, as homes continue to retain their value despite increased inventory compared with last year.”4

Dr. Selma Hepp, chief economist for the data firm CoreLogic, projects that home prices will keep rising at a gradual pace through the rest of 2024. “Spring home price gains are already off to a strong start despite continued mortgage rate volatility. That said, more inventory finally coming to market will likely translate to more options for buyers and fewer bidding wars, which typically keeps outsized price growth in check.”12

 

What does it mean for you?  An increase in more affordable housing stock is great news, especially for first-time buyers. And with home values expected to keep rising, an investment in real estate could help you build wealth over time. Reach out to discuss your goals and budget, and we can help you decide if you’re ready to take your first step on the property ladder.

 

DESIRE TO OWN PERSISTS, BUT AFFORDABILITY REMAINS AN OBSTACLE

Surveys show that the American dream of homeownership is alive and well, despite the financial challenges. In fact, a recent poll by Realtor.com found that 55% of Millennial and 40% of Gen Z respondents believe that now is a good time to buy a home.13 

 

According to Fannie Mae Chief Economist Doug Duncan, buyers are starting to adapt to the new economic reality. “With the historically low rates of the pandemic era now firmly behind us, some households appear to be moving past the hurdle of last year’s sharp jump in rates, an adjustment that we think could help further thaw the housing market. We noted in our latest monthly forecast that we expect to see a gradual increase in home listings and sales transactions in the coming year." 

 

The Realtor.com study also revealed that even a small drop in mortgage rates could give a big boost to homebuyer demand and affordability. In fact, 40% of the buyers polled would find a home purchase attainable if rates fall under 6%, and an additional 32% plan to enter the market if rates dip below 5%.13I

 

But waiting for rates to drop isn’t the only approach that Americans are using to afford a home. A survey by U.S. News & World Report found that determined homebuyers are employing a variety of strategies, including shopping multiple lenders (52%), purchasing discount points to lower their rates (36%), and opting for adjustable-rate mortgages (36%). More than three-quarters of today’s buyers also hope to refinance to a lower rate in the future.14

 

Despite the obstacles, these respondents remain steadfast in their desire to own a home, listing financial benefits, stability, and more space as their top motivations for wanting to buy.14

 

What does it mean for you?  If you’re dreaming of a new home, let’s talk. We can help you evaluate your options and connect you with a mortgage professional to discuss strategies you can use to make your monthly payments more affordable. And remember, in many cases, you can refinance if rates drop in the future.

 

If you have plans to sell, it will be crucial to enlist the help of a skilled agent who knows how to maximize your profit margins and draw in qualified buyers. Reach out for a copy of our multi-step Property Marketing Plan.

 

WE'RE HERE TO GUIDE YOU 

While national housing reports can give you a “big picture” outlook, much of real estate is local. And as local market experts, we know what's most likely to impact sales and drive home values in your particular neighborhood. As a trusted partner in your real estate journey, we can guide you through the market's twists and turns.

 

If you’re considering buying or selling a home in 2024, contact us now to schedule a free consultation. Let’s work together and craft an action plan to meet your real estate goals.

 

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate for advice regarding your individual needs.

 

Sources:

  1. CBS News -
    https://www.cbsnews.com/news/federal-reserve-rate-decision-pause-december-13/

  2. Bankrate -
    https://www.bankrate.com/mortgages/historical-mortgage-rates/

  3. Fannie Mae -
    https://www.fanniemae.com/media/50096/display

  4. Realtor.com -
    https://www.realtor.com/research/april-2024-data/

  5. Bankrate -
    https://www.bankrate.com/real-estate/is-the-housing-market-about-to-crash/

  6. NPR -
    https://www.npr.org/2024/05/01/1248454950/federal-reserve-inflation-interest-rates

  7. Realtor.com -
    https://www.realtor.com/news/trends/will-the-fed-cut-interest-rates-2024-housing-market/

  8. The Mortgage Reports -
    https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional

  9. Fast Company -
    https://www.fastcompany.com/91106568/housing-market-inventory-rising-across-country-maps

  10. Realtor.com -
    https://www.realtor.com/research/2023-q1-sellers-survey-btts/

  11. Fannie Mae -
    https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey

  12. CoreLogic -
    https://www.corelogic.com/press-releases/corelogic-us-annual-home-price-growth-slows-still-up-by-over-5-february/

  13. Realtor.com -
    https://www.realtor.com/research/america-dream-survey-feb-2024/

  14. US News & World Report -
    https://money.usnews.com/loans/mortgages/articles/2024-homebuyer-survey

 

Posted in Selling Your Home
June 6, 2024

May 2024 Real Estate Market Update

 

Let's take a look at the real estate market. Currently there are 235 sales pending in the market overall, leaving 821 listings still for sale. The resulting pending ratio is 22.3%(235dividedby1,056). So you might be asking yourself, that's  great... but what exactly does it mean?

I'm glad you asked! 

The pending ratio indicates the supply  and demand of the market. Specifically, a high ratio means that listings are in demand and quickly going to contract. Alternatively, a low ratio means there are not enough qualified buyers for the existing supply.  Taking a closer look, we notice that the$300K-$400Kpricerangehasa relatively large number of contracts pending sale.

We also notice that the $300K-$400K price range has a relatively large inventory of properties for sale at 254 listings. The median list price (or asking price) for all properties in this market is $375,000.  A total of 1269 contracts have closed in the last 6 months with a median sold price of $320,000.

Breaking it down, we notice that the $200K - $300K price range contains the highest number of sold listings.  Alternatively, a total of 32 listings have failed to sell in that same period of time. Listings may fail to sell for many reasons such as being priced too high, having been inadequately marketed, the property was in poor condition, or perhaps the owner had second thoughts about selling at this particular time.

The $300K-$400K price range has the highest number of off-market listings at 7 properties.  Looking at the chart to the right, you might be wondering why average days on market (DOM) is important. This is a useful measurement because it can help us to determine whether we are in a buyer's market (indicated by high DOM), or a seller's market (indicated by low DOM). Active listings (properties for sale) have been on the market for a median time of 52 days.

Analysis of sold properties for the last six months reveals a median sold price of $320,000 and 70 days on market. Notice that properties in the $100K-$200K price range have sold quickest over the last six months. The recent history of sales can be seen in the two charts below.

The median sold price for the last 30days was $330,000 with a DOM of 67 days. Since the recent DOM is less than the median DOM for the last 6 months, it is a positive indicator for demand. It is always important to realize that real estate markets can fluctuate due to many factors, including shifting interest rates, the economy, or seasonal changes.

Ratios are simple ways to express the difference between two values such as list price and sold price. In our case, we typically use the list-to-sale ratio to determine the percentage of the final list price that the buyer ultimately paid. It is a very common method to help buyers decide how much to offer on a property. Analysis of the absorption rate indicates an inventory of 3.9 months based on the last 6 months of sales. This estimate is often used to determine how long it would take to sell off the current inventory of properties if all conditions remained the same. It is significant to mention that this estimate does not take into consideration any additional properties that will come onto the market in the future.

Posted in Real Estate News
May 9, 2024

April 2024 Real Estate Market Update

 

Let's take a look at the real estate market. Currently there are 288 sales pending in the market overall, leaving 743 listings still for sale. The resulting pending ratio is 27.9% (288 divided by 1,031). So you might be asking yourself, that's great... but what exactly does it mean? I'm glad you asked!

 

The pending ratio indicates the supply & demand of the market. Specifically, a high ratio means that listings are in demand and quickly going to contract. Alternatively, a low ratio means there are not enough qualified buyers for the existing supply.

 

Taking a closer look, we notice that the $300K - $400K price range has a relatively large number of contracts pending sale. We also notice that the $300K - $400K price range has a relatively large inventory of properties for sale at 201 listings. The median list price (or asking price) for all properties in this market is $389,000.

 

A total of 1129 contracts have closed in the last 6 months with a median sold price of $314,000. Breaking it down, we notice that the $200K - $300K price range contains the highest number of sold listings. Alternatively, a total of 34 listings have failed to sell in that same period of time. Listings may fail to sell for many reasons such as being priced too high, having been inadequately marketed, the property was in poor condition, or perhaps the owner had second thoughts about selling at this particular time. The $300K - $400K price range has the highest number of off-market listings at 11 properties. 

 

Looking at the chart to the right, you might be wondering why average days on market (DOM) is important. This is a useful measurement because it can help us to determine whether we are in a buyer's market (indicated by high DOM), or a seller's market (indicated by low DOM). Active listings

(properties for sale) have been on the market for a median time of 51 days.

 

Analysis of sold properties for the last six months reveals a median sold price of $314,000 and 71 days on market. Notice that properties in the $100K - $200K price range have sold quickest over the last six months. The recent history of sales can be seen in the two charts below. The median sold price for the last 30 days was $309,000 with a DOM of 63 days.

 

Since the recent DOM is less than the median DOM for the last 6 months, it is a positive indicator for demand. It is always important to realize that real estate markets can fluctuate due to many factors, including shifting interest rates, the economy, or seasonal changes. "The median list-to-sales ratio for this area is 98.4%."  Ratios are simple ways to express the difference between two values such as list price and sold price. In our case, we typically use the list-to-sale ratio to determine the percentage of the final list price that the buyer ultimately paid. It is a very common method to help buyers decide how much to offer on a property.  

 

Analysis of the absorption rate indicates an inventory of 3.9 months based on the last 6 months of sales. This estimate is often used to determine how long it would take to sell off the current inventory of properties if all conditions remained the same. It is significant to mention that this estimate does not take into consideration any additional properties that will come onto the market in the future.

 

Posted in Market Updates
May 2, 2024

The Ultimate Relocation Guide

The Ultimate Relocation Guide: From Finding a House to Feeling at Home

 

The peak moving season is upon us. In fact, according to Move.com, almost 70% of U.S. moves occur between May and September.1 And while the percentage of Americans who move each year has declined, the desire to relocate remains strong.2,3 

In fact, Architectural Digest recently declared “Americans are restless” after a survey found that 55% of adults “are moving, plan to move, or want to move” in 2024. The top reasons included: increased affordability; desire for safety; and closer proximity to work, family, or friends.3

If you’re one of those millions of Americans yearning for a change, this guide is for you. 

Sure, moving can feel overwhelming, and it’s notoriously stressful. But, we’ve outlined six steps to make your move easier. Our hope is to alleviate some of the hassle of relocating—so you can focus on the adventure ahead!

 

1. CHOOSE A COMMUNITY

When planning a relocation, one of the first things you’ll need to decide is where you want to live. This could be as broad as an area of town, or you might narrow it down to a specific neighborhood. 

Depending on your priorities, you may want to start with communities that are close to work, friends, family and/or your preferred schools. If you commute, map out the route and check on the availability of public transportation, if you plan to use it. Then, if possible, try out the commute during rush hour to see what it’s like.

Next, it’s crucial to consider housing prices and cost of living so you don’t set your sights on an area that you can’t realistically afford. Don’t forget to look up local crime statistics to ensure the community is safe. Finally, visit any neighborhoods you’re considering to gauge the vibe and observe characteristics, like pedestrian accessibility, retail offerings, and population density. 

Researching the ins and outs of various communities can be a time-consuming and sometimes difficult process, but we’re here to help! Give us a call to discuss your needs and aspirations, and we’d be happy to provide our recommendations of neighborhoods that may be a good fit for you.


2. FIND YOUR NEW HOME

Once you’ve chosen an area to settle, the next decision you’ll need to make is whether you want to rent or buy a home. Renting can be a good option if you’re new to town, especially if you’re still saving up for a downpayment or you’re not ready to commit to a permanent location. Benefits include flexibility, less maintenance, and lower upfront costs. 

But, if you want to avoid multiple moves—and you’re financially able—there’s no reason to delay the benefits of buying a home. Not only has homeownership been shown to increase your quality of life, but it’s also one of the best ways to protect and grow your wealth.

The value of real estate will typically appreciate over time, and owners can build equity as they pay down their mortgage. Homeowners can also receive federal income tax deductions for mortgage interest and property taxes.

But, perhaps most importantly, homeownership offers stability. Property owners aren’t subject to the mercy of their landlords each year. According to Statista, average U.S. rental prices have risen more than 42% in the past 10 years.5 In contrast, a fixed-rate mortgage payment doesn’t rise at all.

If you decide to purchase a home and you choose us to represent you, you can rest easy knowing that we will be there for you throughout the entire journey, working hard to make the experience as easy and enjoyable as possible. Or, if you’re moving to a new area, we can refer you to a local agent in our network who shares our commitment to client service.

 

For more information about buying a home and a timeline of the home buying process, reach out to request a free copy of our Home Buyer’s Guide.


3. SELL OR RENT OUT YOUR CURRENT HOME

If you already own a home, you’ll also need to start the process of either selling it or renting it out. We can help you evaluate your options based on current market conditions.

In many cases, our clients choose to sell so that they can use the equity in their current home to make a downpayment on their next one. But selling your home while simultaneously buying a new one can feel daunting to even the most seasoned homeowner. 

Here are some of the most frequent concerns we hear from clients and our tips for addressing them:

  •  What will I do if I sell my house before I can buy a new one?

Check out furnished apartments, vacation rentals, and month-to-month leases. You may even find that a short-term rental arrangement can offer you an opportunity to get to know your new neighborhood better.

  • What if I get stuck with two mortgages at the same time?

Ask us about contingencies that can be included in your contracts. For example, it’s possible to add a contingency to your purchase offer that lets you cancel the contract if you haven't sold your previous home. We can discuss the pros and cons of these types of tactics and what’s realistic given the current market dynamics.

  •  What if I mess up my timing or burn out from all the stress?

Enlist support as early as possible. It's our job to guide you and advocate on your behalf, so don't be afraid to lean on us throughout the process. We’re here to ease your burden and make your move as seamless and stress-free as possible.

 

In addition to answering your questions, we’ll give you an idea of how much equity you have in your current home so you know how much you can afford to spend on your new one. Part of that process will include a plan to maximize your current home’s sale price. We utilize a proven strategy that’s designed to achieve an efficient sale while boosting your profits.

For a thorough breakdown of the technologies and marketing activities we use to get you the most money for your home sale, ask us for a copy of our Property Marketing Plan.

 


4. PLAN YOUR DEPARTURE

Preparing for a move can be both exhilarating and exhausting. Fortunately, you don’t have to do everything in a day. You don’t have to do it all alone, either. When you work with us, we’ll be there every step of the way to help you navigate this process with ease. To that end, here are some of our top tips to help you plan for your departure.

If you have children, we typically advise that you start by sharing news about the move in an age-appropriate way. If possible, take them on a tour of your new home and neighborhood. This can alleviate some of the mystery and apprehension around the move. Don’t forget to contact their current and future schools, as well, to arrange for transfer and enrollment.

Next, you’ll want to start packing. To maintain order and make unpacking easier, we recommend packing one room at a time. Clearly label each box with its contents and the room it belongs to. And remember, there’s no use taking extraneous items with you. Use this opportunity to purge or donate possessions that you no longer need.

 

If you will be using a moving company, start researching and pricing your options. Make sure you’re working with a reputable service, and try to avoid paying a large deposit before your belongings are delivered. Once you have a moving date scheduled, you should arrange to have your utilities turned off or, if possible, transferred into the new homeowner’s name.

Finally, if you will be leaving friends or family behind, schedule get-togethers before your departure. The last days before moving can be incredibly hectic, so make sure you block off some time in advance for proper goodbyes.

Parting with a home and community you love can be hard, so try to stay focused on the exciting opportunities ahead. Feel free to reach out for referrals to moving companies, packing services, housekeepers, or any other resources that will make your move easier. We’d love to help.

 


5. PREPARE FOR YOUR ARRIVAL

While it’s tempting to get wrapped up in the departure details, don’t forget to plan ahead for your arrival at your new home. To make your transition go smoothly, you should start preparing well before moving day. Here are a few pro tips to help you get started.

First, think about the utilities that will need to be turned on, especially essentials like water, electricity, and gas. Be sure to notify any relevant parties—banks, credit cards, subscriptions, etc.—about your change of address so you don’t miss any important bills, notices, or deliveries. You’ll also want to notify the postal service and submit a mail forwarding request.

If you plan to remodel, paint, or install new flooring, it’s often easier to have it done before you bring in all of your belongings. You may also want to have the house professionally cleaned before moving in. 

 

Don’t forget about the items you’ll need (think toothbrush, towels, bedsheets) to make it through the first night in your new home. Designate some boxes with “Open Me First!” labels. (Pro tip: Keep a tool kit front and center for all that reassembling.) 

Finally, create a list of all the restaurants you want to try and places you want to visit around your newly purchased home. Having a to-explore list keeps everyone’s spirits high and gives you starting points to settle into the neighborhood. If you’re relocating to our area, we can help! Reach out for a list of recommendations.

 


6. GET SETTLED IN YOUR NEW SPACE

Studies show that moving can lead to feelings of loneliness and depression.6 However, there are ways to combat these negative effects. Here are a few strategies to help you and your family get settled in the new space.

If you have children, start by unpacking their rooms first. Seeing familiar items will help ease their transition and establish a “safe zone” where they can hang out away from the chaos of moving day. If possible, let them have a say in how their room is decorated.

 

Pets can also get overwhelmed by a new, unfamiliar space. Let them adjust to a single room first, which should include their favorite toys, treats, food and water bowl, and a litter box for cats. Once they seem comfortable, you can gradually introduce them to other rooms in the home.

Don’t forget to take care of yourself, too. Try to schedule breaks to get out of the house and investigate your new area. If you travel by foot or bicycle, you’ll gain the mood-boosting advantages of fresh air and exercise. 

 

You can combat feelings of isolation by making an effort to meet people in your new community. Find a local interest group, take a class, join a place of worship, or volunteer for a cause. Don’t wait for friends to come knocking on your door. Instead, go out and find them.

To that end, make an effort to introduce yourself to your new neighbors, invite them over for coffee or dinner, and offer assistance when they need it. Once you’ve developed friendships and a support system within your new neighborhood, it will truly start to feel like home.



LET’S GET MOVING

While moving is never easy, these steps offer an action plan to get you started on your new adventure. With a little preparation—and the right team of professionals to assist you—it is possible to have a positive relocation experience.

 

We specialize in assisting home buyers and sellers with a seamless and “less-stress” relocation. Along with our referral network of moving companies, contractors, cleaning services, interior designers, and other home service providers, we can help take the hassle and headache out of your upcoming move. Give us a call or message us to schedule a free, no-obligation consultation!



The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

 

Sources:

 

  1. Moving.com -
    https://www.moving.com/tips/12-tips-for-moving-during-peak-moving-season/

  2. Moving.com -
    https://www.moving.com/tips/moving-trends-predictions-for-2024/

  3. Architectural Digest -
    https://www.architecturaldigest.com/reviews/moving/moving-trends-survey

  4. National Association of Realtors -
    https://www.nar.realtor/infographics/the-benefits-of-homeownership

  5. Statista -
    https://www.statista.com/statistics/200223/median-apartment-rent-in-the-us-since-1980/

  6. Psychology Today -
    https://www.psychologytoday.com/us/blog/is-where-you-belong/201607/why-youre-miserable-after-move

Posted in Buying a Home
April 9, 2024

6 Strategies to Save on Home Insurance Premiums

6 Strategies to Save on Home Insurance Premiums

 

From wildfires to floods, the past few years have brought a historic number of devastating climate and weather events to the United States. In 2023 alone, there were 28 individual weather-related disasters that caused at least $1 billion in damages each.

 

These events triggered a huge influx of home insurance claims, and analysts expect the increase in both catastrophes and claims to continue. Adding to the problem, construction labor and supply costs have risen, making it more expensive to repair affected homes. Consequently, home insurance rates have surged: In 2024, Bank rate reports, premiums are already up an average of 23%, following double-digit increases the previous year.2,3 

 

In disaster-prone regions, the situation is even more challenging. Some insurers have pulled out of risky areas entirely, and many of those that still offer policies in high-risk areas have doubled or even tripled their premiums.4

 

For most homeowners, comprehensive home insurance coverage is crucial for financial security—but massive rate increases can turn a once-affordable home into a financial burden. They can also pose a serious challenge for sellers. A home insurance policy is typically required to get a mortgage, and, in some hard-hit regions, we’re seeing sales fall through or homes sit on the market because insurance policies are unattainable or too expensive.5,6

 

But don’t panic! While these broader trends may be out of your control, there’s still plenty you can do to save. Here are our top six strategies to slash insurance premiums while maintaining the protection you need. 


1. SHOP AROUND

 

Getting multiple quotes is a smart move for many major purchases, including home insurance. We recommend reviewing at least three estimates before you commit to a policy. You can get quotes either by reaching out to insurers directly or by working with an independent insurance broker.7 You’ll need to provide detailed information about the property you’re insuring and your claims history.

Make sure you read policies carefully before you choose. Sometimes, a policy can look like a better deal at first glance but turn out to have important coverage gaps. Be sure to consider how much the policy will pay out to repair or replace your home and review caps on personal possession and liability claims. It’s also smart to read reviews from policyholders (Trustpilot is a good place to start) and ratings published by organizations like the Better Business Bureau and J.D. Power. 

For help choosing the right policy, reach out to us for a list of trusted insurance professionals.


2. INCREASE YOUR DEDUCTIBLE

 

The size of your deductible—which is the amount you pay before your insurance coverage kicks in on a claim—is a major factor in your insurance cost.

A low deductible, such as $500, comes with higher premiums, while a higher deductible, like $2,500 or even $5,000, costs less on a monthly basis. In some cases, you may be able to customize your coverage further by designating a different deductible for certain kinds of claims, such as those caused by named storms or natural disasters. 

If you are confident that you have enough in savings to cover that initial outlay if needed, choosing a higher deductible can help you save significantly over the long term. According to Nerdwallet, raising your deductible from $1,000 to $2,500, for example, could save you an average of 11% each year.8


3. BUNDLE MULTIPLE TYPES OF INSURANCE

 

Insurers want to get as much of your business as possible, so most offer significant discounts if you bundle your home and auto insurance, meaning that you package the two policies together. With some insurers, you can get even higher savings by bundling more than home and auto—RV, boat, jewelry, and life insurance are potential options to consider. 

According to US News and World Report, insurers typically offer customers who bundle home and auto insurance 10-25% savings on monthly premiums. This approach also has other advantages: It cuts down on your paperwork, and in some cases—like if a storm damages both your home and car—you may be able to pay just one deductible instead of two when you file a claim.

However, before you sign on the dotted line, remember strategy #1 and be sure to shop around. In some cases, bundling isn’t the cheaper option, and bundling deals vary between companies. It’s also critical to carefully check that the bundled coverage offers everything you need.


4. ASK ABOUT AVAILABLE DISCOUNTS

 

Did you know that being a nonsmoker might qualify you for a home insurance discount?8 Some insurers offer some surprising incentives for policyholders who pose a statistically lower risk of filing a claim. In the case of nonsmokers, that’s because of the decreased risk of a home fire.

Many carriers also offer discounts to military-affiliated families, homeowners in certain professions, such as teachers or engineers, or recent homebuyers. Sometimes, you can also save by opting for paperless billing or paying your premiums for a full year upfront.10 

Since available discounts vary significantly between insurers, the best strategy is to simply ask a representative for the full list of available discounts so you can see what cost savings might be available to you. 


5. AVOID MAKING SMALL CLAIMS

 

Worried that your premiums will rise significantly in the future? Try to avoid making a claim unless truly necessary. Many insurers offer discounted rates to policyholders who go a certain number of years without filing a claim, and filing multiple claims typically results in large increases.10 If you file too many, you may even risk nonrenewal of your policy.11

Since the cost of even a small premium increase can add up significantly over time, if you have minor damage to your home—for example, if a few shingles blew off your roof in a windstorm—it may be a wiser long-term financial decision to pay out of pocket instead of filing a claim. 

If the cost of the repair is less than your deductible, it never makes sense to file, and if it’s just slightly above your deductible, it’s also usually best to pay for the repairs yourself. Additionally, always be sure to review your policy before you make a claim. Even claims that are denied can count against you, so it’s not worth filing if the damage is clearly excluded from coverage.11 

If you find yourself in this situation, feel free to reach out for a list of reasonably-priced professionals who can help with home repairs.


6. BE STRATEGIC ABOUT HOME IMPROVEMENTS

 

Insurance premiums alone may not be the deciding factor for a home improvement project, but it’s important to know how renovations could impact your rates—for better or worse.

For example, some upgrades and repairs can reduce your premiums by making your home safer or less prone to certain types of damage. These include:12

  • Upgrading your electrical system
  • Updating your plumbing
  • Installing a monitored security system
  • Adding a fire sprinkler system
  • Replacing the roof

 

On the other hand, some upgrades can raise premiums significantly, either because they increase the value of your home (and therefore the cost to replace it) or because they pose a hazard. These include:12

 

  • Installing a swimming pool or other water features
  • Building an extension or expanding your living space
  • Upgrading materials, like flooring or countertops
  • Adding a fireplace or woodstove

Whether or not your planned renovations are on either of these lists, it’s wise to inform your insurer about changes you make to your home—otherwise, you may risk gaps in coverage. And you’re always welcome to check with us before you begin any home improvement project to find out how it could impact the value and resale potential of your home.



BOTTOMLINE: Protect Your Investment Without Sacrificing Enjoyment of Your Home

Getting the coverage you need for financial security without overpaying can be a tricky balance, especially in today’s environment. But remember, while it’s important to find the best deal you can, home insurance isn’t an area to skimp on. 

For advice on your specific risks and the type of coverage you need, we recommend consulting with a knowledgeable insurance professional. We’re happy to connect you with a trusted adviser in our network. And if you’re considering a home renovation, feel free to reach out for a free consultation on how it might affect your property value (and your premiums). 

 

 

The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, insurance, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

  1. Climate.gov -
    https://www.climate.gov/news-features/blogs/beyond-data/2023-historic-year-us-billion-dollar-weather-and-climate-disasters 

  2. Bankrate - 

https://www.bankrate.com/insurance/homeowners-insurance/homeowners-insurance-cost/ 

  1. Policygenius -
    https://www.policygenius.com/homeowners-insurance/home-insurance-pricing-report-2023/ 

  2. CNN - 

https://www.cnn.com/2023/09/20/business/insurance-price-increase-risk-climate-first-street-dg/index.html 

  1. BBC - 

https://www.bbc.com/news/business-66367224 

  1. US News - 

https://realestate.usnews.com/real-estate/articles/how-climate-change-could-impact-your-home-value 

  1. Nerdwallet - 

https://www.nerdwallet.com/article/insurance/how-to-shop-for-homeowners-insurance 

  1. Nerdwallet - 

https://www.nerdwallet.com/article/insurance/save-on-homeowners-insurance 

  1. US News and World Report - 

https://www.usnews.com/insurance/homeowners-insurance/how-to-bundle-home-and-auto-insurance 

  1. Marketwatch - 

https://www.marketwatch.com/guides/insurance-services/how-to-save-on-homeowners-insurance/ 

  1. Bankrate - 

https://www.bankrate.com/insurance/homeowners-insurance/when-to-file-a-home-insurance-claim/#when 

  1. Bankrate - 

https://www.bankrate.com/insurance/homeowners-insurance/home-insurance-and-renovations/  

 

Posted in Real Estate News
April 9, 2024

March 2024 Real Estate Market Update

 

Navigating the Real Estate: Insights into Today's Market Trends for Bryan and College Station

Welcome to our latest exploration of the dynamic world of real estate! In this blog, we'll take a deep dive into the current trends and dynamics shaping the market landscape. Whether you're a seasoned investor, a prospective buyer, or simply intrigued by the intricacies of the housing market, join us as we unravel the mysteries and unveil the insights that could shape your next move.

 

Unveiling Market Insights:

Let's start with the numbers, shall we? At first glance, the real estate market seems to be humming along, with a pending ratio of 27.0%. But what does this mean exactly? Essentially, it's a barometer of supply and demand, indicating the pace at which properties are moving off the market. A closer look reveals fascinating patterns: the $200K - $300K price range is a hive of activity, while the $300K - $400K range boasts a substantial inventory waiting to be snapped up.

 

Price Points and Perceptions:

Ah, the eternal dance of list prices and sold prices! With a median list price of $378,000 and a median sold price of $315,000, it's clear that negotiations are a key part of the game. Buyers rejoice at the prospect of scoring a deal, while sellers strategize to maximize their returns. And speaking of returns, properties in the $100K - $200K range are the sprinters of the market, flying off the shelves in record time.

 

Deciphering the Days on Market:

If time is money, then the Days on Market (DOM) are the ticking hands of fate in the real estate realm. At 47 days for active listings, the market seems to be in a state of steady motion. But delve deeper, and you'll find intriguing nuances: certain price ranges command attention, with properties in the $100K - $200K range disappearing like hotcakes.

 

The Pulse of Recent Sales:

In the ever-changing landscape of real estate, recent sales offer a glimpse into the here and now. With a median sold price of $326,958 and a DOM of 73 days for the last 30 days, the market appears to be alive and kicking. Could this be a sign of sustained demand, or merely a fleeting moment in time? Only time will tell.

 

Navigating Market Fluctuations:

Ah, the elusive beast of market fluctuations! Like a tempestuous sea, the real estate market is subject to the whims of interest rates, economic tides, and seasonal shifts. It's a reminder that while we can analyze the data and glean insights, the future remains shrouded in uncertainty.

 

As we conclude our journey through the twists and turns of today's real estate market, one thing is abundantly clear: it's a landscape teeming with opportunity and intrigue. Whether you're a buyer, a seller, or an eager observer, the key lies in understanding the trends, deciphering the data, and navigating the ever-shifting currents with confidence and agility. So, until next time, happy hunting!

Posted in Real Estate News
Feb. 6, 2024

February Real Estate Market Update for Bryan and College Station

Let's take a look at the Bryan College Station real estate market. Currently there are 188 sales pending in the market overall, leaving 651 listings still for sale. The resulting pending ratio is 22.4% (188 divided by 839). So you might be asking yourself, that's great... but what exactly does it mean? I'm glad you asked!

The pending ratio indicates the supply & demand of the market. Specifically, a high ratio means that listings are in demand and quickly going to contract. Alternatively, a low ratio means there are not enough qualified buyers for the existing supply. 

Taking a closer look, we notice that the $200K - $300K price range has a relatively large number of contracts pending sale.  We also notice that the $300K - $400K price range has a relatively large inventory of properties for sale at 195 listings. The median list price (or asking price) for all properties in this market is $379,000. A total of 960 contracts have closed in the last 6 months with a median sold price of $315,575.

Breaking it down, we notice that the $200K - $300K price range contains the highest number of sold listings.  Alternatively, a total of 30 listings have failed to sell in that same period of time. Listings may fail to sell for many reasons such as being priced too high, having been inadequately marketed, the property was in poor condition, or perhaps the owner had second thoughts about selling at this particular time. The $300K - $400K price range has the highest number of off-market listings at 9 properties. 

Active listings (properties for sale) have been on the market for a median time of 77 days.  Analysis of sold properties for the last six months reveals a median sold price of $315,575 and 67 days on market. The sales can be seen in the two charts below. The median sold price for the last 30 days was $314,200 with a DOM of 73 days.

 

 

Posted in Market Updates
Jan. 3, 2024

December Real Estate Market Update

Posted in Market Updates
Jan. 3, 2024

Opportunities for Home Buyers and Sellers in 2024

 

Real Estate Market Forecast: Opportunities for Home Buyers and Sellers in 2024

 

A growing share of home buyers and sellers sat on the sidelines last year as the pace of home sales continued its downward trajectory.1 In fact, since the Federal Reserve began its series of interest rate hikes in 2022, the combination of higher borrowing costs and record-high home prices has fostered the steepest real estate market slowdown since the 2008 recession.2 

 

Priced out of the market, a generation of would-be buyers has been forced to delay their plans for homeownership.At the same time, current owners—reluctant to give up their pandemic-era mortgage rates—are waiting to sell, which has resulted in a sharp drop in listings.4

 

But there may be some relief in sight: In December, the Fed signaled that it was done raising interest rates—and suggested that it could cut rates by 0.75% over the coming year. While mortgages don’t directly follow the federal funds rate, they typically move in tandem—so cheaper home loans may finally be on the horizon.5

 

Lower mortgage rates should bring some much-needed movement back into the real estate sector. But with a market this fluid, the home buyers and sellers with an edge will be those who proactively leverage a real estate agent’s on-the-ground expertise and stay flexible so that they can quickly adapt to changes.

 

What does that mean for you? Read on to learn more about the current state of the U.S. housing market, the potential opportunities for buyers and sellers, and economists’ predictions for the year ahead.



HOME PRICES WILL REMAIN RELATIVELY STABLE

Not even 8% mortgage rates could bring home prices crashing down in 2023, as some prospective home buyers may have hoped. In fact, on average, U.S. property values ended the year higher—with declines in some areas of the country offset by appreciation in others.6

 

Prices typically fall when rising interest rates drive down demand. So what’s keeping home values high? 

 

Mike Simonsen at Altos Research points to a nationwide housing shortage: “Declining home prices probably require that supply-and-demand imbalance, and what we have is really a balance. There's a balance between low demand and low supply.”7

 

Analysts expect that equilibrium to continue to prop up home prices in 2024, although the specific forecasts vary. For example, economists at Realtor.com predict that the median home price will fall slightly, by 1.7%, while those at Fannie Mae project modest price growth of 2.8%.6,8

 

However, experts widely agree: Mortgage rates will be the largest driver of property values. If rates fall faster than expected, more buyers will enter the market—which could send home prices soaring higher.

 

What does it mean for you?  There’s no evidence that home prices are headed for a major decline. So if you’re ready and able to afford a home, this is a great time to test the waters. The best bargains are often found in a slower market, like the one we’re experiencing right now. Contact us to discuss your goals and budget. We can help you make an informed decision about the right time to buy.

 

And if you’ve been waiting to sell your home, this could be your year. Price growth has slowed, so now is the time to maximize your equity gains while minimizing your competition. Contact us for recommendations and to find out what your home could sell for in today’s market.



MORTGAGE RATES SHOULD FINALLY TREND DOWN

The best news we've got incoming for 2024? The extra-high mortgage rates that have weighed heavily on the real estate market may finally be headed south.

 

At its December meeting, the Fed signaled that the worst is likely behind us and that it expects to cut its overnight rate in 2024. Analysts predict that mortgage rates will fall in lockstep.5

 

“Given inflation continues to decelerate and the Federal Reserve Board’s current expectations that they will lower the federal funds target rate next year, we likely will see a gradual thawing of the housing market in the new year,” said Freddie Mac’s Chief Economist Sam Khater following the announcement.9

 

The average 30-year fixed mortgage rate has already declined from an October high of around 8%, and analysts at Fannie Mae, the Mortgage Bankers Association, and Realtor.com all forecast that rates will trend down this year, ending 2024 closer to 6%.7

 

However, it’s not all good news: It appears that the days of 3% mortgage rates are firmly behind us. “As long as the economy continues to motor along, the new normal of higher rates is here to stay,” explains Greg McBride, chief financial analyst for Bankrate.4 So, when it comes to a home loan, borrowers may need to adjust their expectations.

 

What does it mean for you?  If you're a prospective home buyer, declining mortgage rates could give you the opportunity to lock in a more affordable monthly payment. And if you purchase before the market reheats, you could secure an especially good deal. To find the lowest rate, it pays to compare lenders. Ask us to refer you to a mortgage broker who can help you shop around for the best option.

 

Sellers also have reason to celebrate buyers' lower interest rates: As the barriers to entry to the housing market decline, they could enjoy more or better offers. Reach out to discuss how we can help you maximize your home’s sales potential.



LOWER RATES WILL BRING SOME BUYERS AND SELLERS BACK TO THE MARKET

Over the past couple of years, higher mortgage rates have cooled home buyer demand. They’ve also delayed the plans of many home sellers, who have been reluctant to trade in their current mortgages for loans that are several points higher. 

 

With so many market participants playing the waiting game, the real estate sector has slowed significantly. National Association of Realtors (NAR) Chief Economist Lawrence Yun estimates that the number of existing home sales fell by 18% last year following a 17% decline in 2022.10

 

However, as financing costs tick down, sales volume is expected to rise. “Lower mortgage rates would help spur home sales activity, which [is] expected to increase in 2024 compared to 2023,” explains Selma Hepp, chief economist at CoreLogic. “Declines in mortgage rates will drive more sellers to trade their existing home and help add much-needed inventory to the market, leading to more transactions.”4

 

There’s also evidence that the patience of holdout home buyers may be waning, despite higher borrowing costs. A recent survey by Bank of America found that the number who are willing to wait for prices or mortgage rates to decline before making a purchase fell from 85% to 62% in just six months.11

 

“When it comes down to it, if buying a home is your goal and within your budget, the best time to buy is when you're ready financially and you can find a home that fits your needs,” Matt Vernon, head of consumer lending at Bank of America, advised in a recent release. “Even in the current interest rate environment, there are clear benefits to purchasing a home and beginning to build equity.”11

 

What does it mean for you?  If you’ve been waiting to buy a home, you might want to consider purchasing before the competition picks up. Pent-up demand could bring a flood of buyers back into the market as mortgage rates decline. Contact us if you’re ready to begin your home search.

 

If you’re hoping to sell this year, you may also want to act fast. An increase in listings will make it harder for your home to stand out. We can help you chart the best course to maximize your profits, starting with a professional assessment of your home’s current market value. Reach out to schedule a free consultation.



THE HOUSING SUPPLY SHORTAGE WILL PERSIST

Will home buyers who are eager for options have more homes to choose from this year?

 

Yun thinks so. He believes sellers will soon grow weary of waiting to list. “Pent-up sellers cannot wait any longer. People will begin to say, ‘life goes on,’” the NAR economist speculated at a November conference. “Listings will steadily show up, and new home sales will continue to do well.”10

 

But not everyone agrees. Economists at Realtor.com forecast that inventory could drop by as much as 14% this year. The decline in existing homes for sale has been compounded by a persistent shortage of new construction, with single-family housing starts falling 10.3% in 2023 and 11.2% in 2022.6

 

Even so, newly-built homes are playing an increased role in easing the supply crunch, accounting for around one-third of all homes for sale in 2023—which was twice the historical average.12 But new construction alone isn’t expected to fill the inventory gap.

 

According to First American Financial Corporation’s Chief Economist Mark Fleming, the U.S. currently has a shortfall of around one million homes, and conditions won’t ease until individual owners re-enter the market. “Only when more homeowners decide to sell, and then buy again, will housing supply and the pace of sales return to anything resembling normal.”13

 

​​What does it mean for you?  Inventory remains tight, but buyers can benefit from the search expertise of a real estate professional. We can tap our extensive network to access off-market and pre-market listings while helping you explore both new construction and existing homes in our area.

 

While sellers will continue to benefit from the low-inventory environment, they should be prepared to compete against brand-new homes. We can help you prep your property for the market and highlight the features most likely to appeal to today’s buyers.



WE'RE HERE TO GUIDE YOU 

While national real estate forecasts can give you a “big picture” outlook, real estate is local. And as local market experts, we know what's most likely to impact sales and drive home values in your neighborhood. As a trusted partner in your real estate journey, we'll keep our ears to the ground so that we can guide you through the market's twists and turns.

 

If you’re considering buying or selling a home in 2024, contact us now to schedule a free consultation. Let’s work together and craft an action plan to meet your real estate goals.



The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

 

Sources:

 

  1. CNN -
    https://www.cnn.com/2023/10/19/homes/existing-home-sales-september/index.html

  2. Goldman Sachs -
    https://www.gspublishing.com/content/research/en/reports/2023/10/23/2d814362-a656-4cb3-8586-bea8591188e3.html

  3. ABC News -
    https://abcnews.go.com/US/millennials-priced-homeownership-feeling-pressure/story?id=105032436

  4. Bankrate -
    https://www.bankrate.com/real-estate/housing-market-2024/

  5. CBS News -
    https://www.cbsnews.com/news/interest-rates-are-paused-heres-why-thats-good-news-for-homebuyers/

  6. Realtor.com -
    https://www.realtor.com/research/2024-national-housing-forecast

  7. NerdWallet -
    https://www.nerdwallet.com/article/mortgages/2024-homebuying-trends-property-line-november-2023

  8. Fast Company -
    https://www.fastcompany.com/90991612/home-price-2024-outlook-fannie-mae

  9. Freddie Mac -
    https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-drop-below-seven-percent

  10. National Association of Realtors -
    https://www.nar.realtor/newsroom/nar-chief-economist-lawrence-yun-forecasts-existing-home-sales-will-rise-by-15-percent-next-year

  11. Bank of America -
    https://newsroom.bankofamerica.com/content/newsroom/press-releases/2023/12/bofa-report-shows-fewer-prospective-homebuyers-willing-to-wait-f.html

  12. Marketplace -
    https://www.marketplace.org/2023/11/27/mortgage-rates-new-home-sales/

  13. First American -
    https://blog.firstam.com/economics/whats-the-outlook-for-the-housing-market-in-2024

Posted in Buying a Home
Nov. 10, 2023

October Real Estate Market Update

 

 

 

Posted in Market Updates