The housing market continues to show promise of an upward turn as the end of the Winter season approaches. Housing prices nationwide are looking toward increase as the spring selling season arrives this month.
In January 2013, prices for homes were up over 9 percent from one year ago. Marked as a little over an 8 percent increase in December, this gain was the highest in almost 7 years. Prices for homes were up 0.7 percent in January from just one month prior.
Nationwide, 48 of 50 states reported rising home prices, with the exception of Illinois and Delaware. In just over 90 out of the 100 largest metro areas in the U.S., prices were up substantially from the end of 2012. With home availability currently lacking, demand for home inventory is on the rise. Homes that had previous owners showed sale increases in early 2013- the most substantial price increase in five years. Included in the list of states that had reported the highest price increases, Nevada checked in at 17.4 percent.
While housing prices continue to climb, housing inventory continues to fall short of the demand for homes for sale- the lowest rate in well over a decade. Home values in 15 states report prices that are within 10 percent highest financial worth.
Housing market signs of an upward swing are exhibited in the number of U.S. home buyers who signed to purchase new homes in the beginning of 2013- up from just one month prior in December. As home prices increase, the push is for homeowners to move toward selling in order to encourage buyers to jump on current prices before they go up.
According to the Case-Shiller national index, residential home prices gained at the quickest rate since 2006. Up 5.9 percent, the 10-city index came in just below the 20-city index which had risen by 6.8 percent. At the end of 2012, both 10 and 20-city indices were up 0.2 percent.
In the Midwestern real estate market, Chicago, Cleveland, Detroit and Minneapolis all reported fallen prices month-over-month. Relatedly, Portland, Seattle and Denver, as well as Dallas and Charlotte, and Washington, D.C. and New York reported fallen prices, as well.
Market gains in housing prices were reported in Las Vegas (up 1.8 percent), Los Angeles (1.1 percent), as well as San Francisco, Phoenix and Miami. Las Vegas' numbers topped the list, proving a steady month-over-month gain. On a year-over-year average, Las Vegas came in at 12.0 percent, just above Minneapolis.
During the fourth quarter, quarterly index figures fell for the first time since the beginning of 2012. However, the index had risen year-over-year for the third consecutive quarter.
The highest year-over-year price recovery was reported in Phoenix, having maintained an over 20 percent improvement for four months in a row. In Las Vegas, home prices are still lower than their all-time high by just over 56 percent.
In 2012, three Las Vegas real estate communities were named in the top 15 for sales. The Mountain's Edge, Providence, and Summerlin communities of Las Vegas were worthy of mention in the national list.
Providence, a northwest Las Vegas community of Las Vegas, came in at number 6 in the top 15 list. 760 home sales in 2012 were reported; that's up 81 percent from 2011. Providence accounts for a land space of 1,200 acres on the Las Vegas community map.
The Summerlin community ranked in the top 15 for homes sales in 2012, as well. The west side community is one of the largest (and growing) communities in the Las Vegas valley. Covering over 22,000 acres of area, Summerlin had 471 sold homes in 2012- this figure is 221 home sales in 2011.
Mountain's Edge (located in the southwest valley of the Las Vegas area) is 3,500 acres in size. Home sales for 2012 were almost 950, ranking it number 5 on the top 15 national list.
In 2012, close to 45,000 homes were sold in across the entire Las Vegas valley. While this figure is slightly down (less than 10 percent) from the previous year, the figure is still considered to be the third highest in the country since the beginning of the millennium.
Nationally, home prices have increased on a year-over-year substructure by over 8 percent. This statistic marks the price advancement in December 2012, and exhibits the largest increase since 2006. Monthly, the average was less than a 1 percent increase. Home prices in January 2013 were expected to rise close to 8 percent from a year ago. Relatedly, home prices were predicted to fall by 1 percent on a month-over-monthly basis; this statistic was from December 2012, to January.
According to Mark Fleming, chief economist for CoreLogic, "December marked 10 consecutive months of year-over-year home price improvements, and the strongest growth since the height of the last housing boom…we expect price growth to continue in January…"
December 2012 marked some substantial gains and highlights in Nevada real estate. Items of mention are: Nevada being included in the group of states with the highest home price appreciation (up 15.3 percent), and excluding distressed sales, being grouped with the states having highest home prices appreciation (up 14.7 percent). Nevada is down 52.4 percent in peak-to-current declines (including distressed transactions); peak-to-current change.
The peak-to-current shift int the national HPI was down almost 27 percent. This average was inclusive of the time period between April 2006 up to December 2012.
The Paseos village of Summerlin in Las Vegas, NV is planning to open five new-home neighborhoods this year. The trail system is also being set to expand, joining neighborhoods and amenities within the neighborhood. Construction of utilities and roads in the area is under way as well, making the expansion project more accessible and convenient to residents and visitors.
Homes in the neighborhood are being priced from the mid-$300,000s, and range from 2,200 all the way 3,800 square feet in size. One and two story homes are available at these price points, as well.
Kevin Orrock, President of Summerlin and executive vice president of communities for The Howard Hughes Corp., claims, "It's great to see this much construction activity again…Summerlin's borders continue to expand…as we add more neighborhood and amenities to the community."
Originating in 1990, the Summerlin neighborhood of Las Vegas has been ranked in the nation's top 10 best-selling master-planned communities for close to twenty years. Housing over 100,000 residents, Summerlin in located on the western side of the Las Vegas valley. Offering over 150 neighborhood parks, 26 schools (public and private), an abundance of shopping, 150 miles of Summerlin Trail System, and more, Summerlin continues to be a desirable place to call home.
There are two options for agents in real estate: represent the seller, or the buyer. Back just a few years ago, the only option for a real estate agency was for the agents to represent the seller. In that scenario, a home seller would acquire a real estate agent in order to sell their home. Essentially, this kind of situation meant that the agent "owed" the seller (accounting, obedience, loyalty, disclosure and care). Potential home buyers would inquire about viewing homes for sale, and an agent would show them houses. In this way, the agent was working as a sub-agent for the seller (whether it was openly advertised this way, or not). By owing the home buyer their skills in addition to honest and fair dealings, the agent was also responsible for disclosing all of the known material facts. The seller got obedience, disclosure of information and loyalty, and the buyer got minor consideration.
Who is responsible for paying for the Buyer's Agent? Initially, the buyer would pay for their own agent, however (over time), this idea did not pan out. The manner in which this concept eventually evolved, is that now when a seller wants to sell their home, there is a contract stating that they will pay for the Buyer's Agent. The agent does not "work" for the seller in a technical sense.
This arrangement allows the buyer to really have the best of both worlds- the exclusivity to hire representation, while the seller is paying for their agent out of the (seller's) closing proceeds.
A common (and false) misconception among buyers is that they can save money if they opt out of having a Buyer Agent's representation. When an agent is hired by a seller, there is an agreement made as to what percentage is being paid at closing. If the buyer is without an agent, and the listing agent (or sub agent) is handling the transaction, the seller will pay the entire percentage to that agent. The person who did not come out on top in this scenario was the buyer; they no longer had anyone working exclusively for them, and saved no money.
Going through the process of buying a home can seem like a daunting task. If you know the right things to look for and the best questions to ask your real estate agent, however, the process can go much more smoothly. Here are some important questions to ask your agent, and why you should ask them:
Q: How long has the property been on the market?
Reason why: The length of time a property has been on the market may indicate the seller's willingness to negotiate.
Q: Have there been any price reductions during the listed period?
RW: The amount of any price reduction, as it relates to the overall purchase price, may indicate the seller's desire to attract an offer.
Q: Have there been any other offers on the property?
RW: It will be helpful to know what offers have been turned down and for what reasons.
Q: What is the motivation of the seller?
RW: Motivation is a key element in any negotiation. As an example, if the seller has already purchased a new property, your ability to close quickly may be an attractive element of the negotiation.
Q: What personal items are included in the sale?
RW: Anything the seller is willing to leave behind that you won't need to buy when you move in has real value. Consider those items in your offer.
Neighborhood Specific:
Q: What is the price range of sold apartments in the area?
RW: This information is important since it will indicate the top and bottom of that specific market.
Q: What is the average time on market for properties?
RW: Short market times may indicate a seller's market. If this is the case, you may face competition from other buyers.
Q: What is the list to sale price ratio in this market?
RW: This information will indicate seller's willingness to negotiate and by how much.
Q: What is the average sales price per square foot of recent solids?
RW: Use this approach where there are similar apartments, amenities and improvements.
Final Recommendation:
If you will be financing the property, get pre-approved for a mortgage prior to making your offer. This will show the seller your commitment and ability to perform. Pre-approval can be extremely important in the sellers' market.
When entering into the detailed process of purchasing a home, there are certain strategies that may help to successfully secure your home loan application. There are also maneuvers to avoid during this time in order to make sure you're getting the best loan possible for your individual needs. It's important to remember that some suggestions remain effective throughout the entire process- from the beginning stages of loan approval through loan settlement.
Often, items like your personal credit, income and asset information have already been secured before you sign your final loan processing papers. Make sure that items that you are in compliance with are as follows:
-always send in credit payments on time (this is a general rule of thumb for keeping a good credit rating at all times).
-keep accounts current (including mortgage information, credit cards, car loans, and related items).
-make all payments early if possible to ensure good standing with credit companies (even if your loan is going to cover the pay-off of your account)
-return phone calls from loan agents, loan officers, settlement companies or anyone involved in a loan transaction within a 2-hour window of a message
-make any lender-required funds available to the loan officer no more than 72 hours AFTER the home inspection has been completed.
-make sure to NOT quit or change jobs during this time. It is crucial to maintain a steady form of employment during the loan process. If changes occur in your employment, consult your loan officer.
-do not apply for credit with anyone except your lender. The more hits your credit score takes at a time reduces your overall credit rating. Relatedly, don't allow any credit inquiries on your credit report.
-try not to make yourself a co-signer for anyone else's purchases, rentals, or credit applications.
-make sure to keep the same bank accounts (including business, checking/personal, and savings) when applying for a home loan. Also, avoid the transferring of money within any of your existing accounts.
-avoid the purchase of vehicles or other real estate during the loan application process.
During 2012, the Las Vegas real estate market fluctuated drastically. With the average price of a single-family home increasing close to 25 percent, real estate changes that hinged primarily on foreclosures shifted to short selling homes. Accounting for over 45 percent of sales in December 2012, short sales swept the valley. Dropping down nearly 10 percent, however, foreclosures slowed dramatically overall.
The last time home prices gained appreciation this significant in Las Vegas was in 2004. Rising home prices in the valley are definitely a topic of interest and conversation in the current Nevada real estate market.
The debt relief act is helping underwater homeowners rethink their current real estate situations. By taking advantage of the act, homeowners can avoid having to claim the forgiven debt as income that could potentially be taxable. Currently, Las Vegas real estate agents are noticing an increase in more traditional home sales (without the involvement of a lender). Las Vegas real estate and home prices are rising rapidly, including townhomes and condominiums. On average, Las Vegas realtors have reported close to 56 percent of homes that were sold in the last quarter of 2012, were paid for in cash.
At this point, the average American is sure to have lost thousands of dollars of market value on their home. As many as 25 percent of American home owners currently owe more than the actual value of their home, leaving them upside-down, financially speaking. Dealing with the loss of finance and equity in this hazardous economic climate can be very much like dealing with the loss of a loved one; the grief affects us in similar ways.
Using stages of grief as way to sift through the terrific losses that so many Americans are currently struggling with, there is a formula to follow and show how one deals with the tragedy of losing a home.
Firstly, feelings of denial are inevitable. Feeling that there can't possibly be a way the the government can continue to let the economic state continue to get worse, reminding oneself that markets fluctuate, and that real estate will "bounce back", are all subtle forms of denial. While it's good to be optimistic, it is unlikely that the real estate market will bounce back so quickly. Relatedly, Americans who are facing foreclosure, equity loss and strife move quickly out of the denial phase, into full blown anger. Blaming other homeowners who walk away from their homes in a bleak market, or those that accepted loans with loose eligibility, leads to anger and hostility.
Trying to bargain, or make temporary improvements, is the next step for some. Loan modifications, appealing to real estate agents or banks, only postpones foreclosure. Once attempts at bargaining have failed, depression can set in. Feelings of hopelessness, and being overwhelmed financially can make homeowners fear for the worst. Missing mortgage payments, increased payments, or avoiding contact with financial lenders due to financial strain can leave homeowners feeling guilty and trapped. Wondering how to recover credit scores, refinance a home, or relocate can be cause for stress and anxiety.
Inevitably, acceptance of the reality of the situation occurs. Taking accountability for mistakes made, and decisions that cannot be taken back, can sometimes lead homeowners to detach emotionally from a home purchase. Instead of viewing a home as an asset, some are likely to begin viewing it as a liability, and seek assistance in walking away from a home.
In order for Americans to make sense of what might be happening at any stage of their homeownership-good, bad, or ugly- it is always best to be true to oneself, seek guidance when necessary, and make the best decision for your future. A home lost does not mean the world is ending; nor does it mean you can't recover and bounce back in the future.