Understanding who today’s buyers and sellers are, what motivates them to move, and what features buyers are looking for in a home will help you expand your marketing reach, provide customers with valuable insights, and turn the focus on the right real estate imagery to help your listing resonate with your target market.

Who are today’s prospective buyers and sellers?

According to Zillow Consumer Housing Trends Data 2023, today’s typical buyer is a married or partnered young adult in their 30s or 40s, has some college education, owns at least one pet and is likely to live in the South (34 percent) or the West (29 percent).

Similar to buyers, today’s typical U.S. seller is 45 years old; partnered, married or previously married; has some college education; and is most likely to sell in the South (40 percent). In mid-2023, the typical seller’s home was a single-family detached house with three bedrooms, 2.5 bathrooms and between 2,000 and 3,000 square feet.

Why are buyers and sellers looking to move?

One of the first questions you may want to ask a prospective client during a digital listing presentation is why they want to purchase a new home or sell.

In the latest Zillow Consumer Housing Trends Report, about 82 percent of sellers reported that at least one life event had an impact on their decision to move and sell their home. More than half (56 percent) cited a change in household or family size, while 41 percent reported remote work, and 37 percent said a new job or job transfer were influential factors triggering their move. For buyers, affordability and job relocations top their motivating factors to move.

What are today’s home buyer looking for in real estate?

Home Office or Flex Space. One consequence of remote-based work is the continued desire for a home office or flex space in a home. According to the Zillow Consumer Housing Trends Report, most prospective homeowners (64 percent) report having an extra room for use as a home office as “very or extremely important” in their search.

Energy-efficient features. The increased awareness of environmental concerns and rising energy costs are helping raise the bar on a home’s energy-efficient features among prospective buyers. According to a Zillow study, homes with energy-efficient features, such as double-pane windows and solar panels, are not only more appealing to buyers but may also sell for more and, sometimes, faster.

Tech in the home search. According to Zillow’s trends data report, today’s buyer wants digital tools that assist remote viewings. A majority (72 percent) report that 3D tours would give them a better feel for the home space than static photos.

Digital options, such as remote viewings and 3D tours, like Listing Showcase’s virtual tour and interactive floor plan, also curry favor with sellers. The Zillow report found that sellers are more likely to hire an agent who includes virtual tours and/or interactive floor plans in their services (78 percent).

Outdoor living spaces. The pandemic triggered a national trend toward outdoor kitchens, patios, decks and al fresco entertainment spaces. Agents can help highlight these coveted features by widening the lens in their listing imagery to show the full property, including adjacent exterior landscaping, pool spaces and outdoor kitchens, with hi-res photography and aerial photography from Listing Media Services.

By checking in often and staying updated with your customers’ changing family dynamics and needs, you’ll be more likely to develop long-term client relationships, win more listings and ultimately help them find home when they’re motivated to move.

 

In the ever-evolving realm of real estate, the current landscape is nothing short of dynamic. A whirlwind of factors has shaped the market, creating a ripe environment for homeowners to seize exciting opportunities. Let’s take a captivating journey through the elements that have transformed the real estate arena.

Riding the Low-Interest Wave

Picture this: near-record low interest rates beckoning aspiring homeowners into a world of affordability. The financial stars have aligned, making home financing more accessible than ever. It’s a golden era for those looking to step onto the property ladder or make a savvy move in the market.

The Inventory Conundrum

However, it’s not all smooth sailing. A constant drumbeat in the real estate symphony is the low inventory blues. The scarcity of available homes has become a defining trend, turning the home-buying experience into a competitive sport. Buyers, armed with determination, are battling it out for their dream dwellings in a market where supply is the hottest commodity.

High Demand, Higher Stakes

Enter the era of high demand—a confluence of low interest rates and a collective yearning for more comfortable living spaces during lockdowns. The result? A surge in buyer demand that has sent shockwaves through the real estate cosmos. It’s a seller’s market, and homes are commanding attention like never before.

The Ripple Effect on Home Values

The interplay of these dynamics has given rise to a noteworthy consequence: a significant escalation in home values. Chances are, your property has felt the impact of this upward trend. The question now is, how can you leverage this to your advantage?

Seize Your Opportunities

1. Bid Farewell to PMI

Did you put down less than 20% when you purchased your home? Now might be the opportune moment to bid farewell to Private Mortgage Insurance (PMI). The surge in your home’s value could empower you to eliminate PMI, paving the way for lower monthly payments. Curious if this applies to you? A comprehensive market analysis holds the answers.

2. Harness Your Home Equity

Eyeing a new abode? Your increased equity is your golden ticket. Let’s embark on a conversation about your equity position and explore what the exciting journey of purchasing a new home looks like for you.

3. Right-Size Your Home

Life is a series of changes, and so are housing needs. Whether you’re ready to upsize, downsize, or simply crave something new, I’m here to guide you through the process. Let’s align your dreams with your home’s value and make your housing aspirations a reality.

In a real estate landscape that’s alive with possibilities, it’s time to turn the page and explore the exciting chapters waiting for you. Let’s navigate the thriving market together and unlock the full potential of your real estate journey

Your Guide to the Housing Market

Home loans that conform to the Fannie Mae and Freddie Mac guidelines tend to have better terms than non-conforming loans. That’s why it’s good news that the Federal Housing Finance Agency (FHFA) recently announced that the conforming loan limits have increased to $766,550 for 2024. This is a $40,350 increase from the $726,200 loan limits of 2023. In some higher-cost areas, the loan limits could be as high as $1,149,825, which is a $60,525 increase from the $1,089,300 high-cost loan limits of 2023. Click here to view a map of all the loan limits across the US. Here are two ways to benefit from this increase:

BUY A HOME

It may make sense for you to consider a new home purchase using the higher loan amounts. This may be the perfect time for you to lock in your interest rate before interest rates move higher.

REFINANCE

It may be worth it to consider a home loan refinance if:

• You currently have a home loan that is near the loan limit
• You’d like to make some home improvements
• You’d like to consolidate other debts into your home loan (such as home equity loans or credit cards)
• You’re paying mortgage insurance and your home has increased in value from the time you purchased the home
• You anticipate a change in your cash flow situation in the coming months (college funding, retirement, elder care, etc.)

Credit/Original Source: CertfiedRealEstateAdvisor

WHAT’S THE ALTERNATIVE?

Where will you live if you don’t buy a house? If you rent a house instead of purchasing a house, you’ll likely be subject to rising rent costs with no real benefit. That’s because none of your rent payments are going toward building equity. On the other hand, if you buy a house, at least a portion of your monthly payment is going toward a principal reduction on the mortgage balance. This means you’ll be building equity even if the home doesn’t go up in value.

 WHAT’S YOUR TIME HORIZON FOR LIVING IN THE HOME?

If your time horizon is more than 4 years, buying a home in a market like this would likely make sense for you. Here’s why: home price appreciation has slowed down a little from the break-neck speed of the past few years. Keep in mind that the fundamentals of the housing market are still strong: demand is greater than supply and will be so for quite some time because we have a housing shortage in the US. This means that even if house prices decline in the near term, they’ll likely start to climb again during the next few years.

In the meantime, what happens if you want to sell the property and the next buyer doesn’t want to pay you as much or more than what you paid? Here’s a potential scenario to consider: let’s say you buy a home and home values immediately drop by 10%, then they start going up by 4.46% per year, which is the long-term average home appreciation rate in the US. It would take roughly 4 years for you to break even and start building wealth through homeownership. In a potentially bad-case scenario like that, are you willing to keep the house for at least 4 years?

 

IS THE HOME AFFORDABLE FOR YOU?

Wages have increased considerably in the past year and are likely to keep rising because there are over 9 million job openings in today’s economy. If you tune out all the noise that’s not specific to you, is the home you want to buy affordable for you given your specific income/employment situation? There’s no one-size-fits-all solution in today’s market. That’s why it’s important to run the numbers for yourself, consider the alternatives, and make your own decision. I’m here to help in any way I can!

Credit/Original Source: CertfiedRealEstateAdvisor

 

Interior design expert Morgan Olsen says these are the fads to watch.

What home improvement projects should your clients take on this year? After crunching the latest data from Thumbtack, a home services website, design expert Morgan Olsen chimes in with her picks for the “ins” and “outs” of the new year.

IN: Smarter homes

Photo credit: ArchiViz / Getty Images

Engineering and technical design services have jumped 105% year over year as more homeowners seek to invest in smart-home upgrades. This may include everything from remotely controlled appliances to smart thermostats and light installations. Olsen predicts these installations will continue to be “hot” in 2024, with homeowners interested in adding convenient and cost-efficient capabilities to their everyday lifestyle.

OUT: Climate change destroying homes

Climate change has been blamed on bringing more unpredictable weather to cities across the U.S., from historic floods to devastating tornadoes. Many homeowners are investing in upgrades and repairs to keep their houses immune to nature’s wrath. Home waterproofing is up 86% year over year, foundation repairs have risen 64%, window installations and repairs are both up 53%, and general structural engineering services are up 61%.

IN: Scented design

 

 

 

 

 

 

Photo credit: Veranika Smirnaya / Getty Images

Olsen believes a room’s scent will become a key design feature for homeowners. Much like a new mirror or accent chair, scent is strongly influencing design aesthetics in 2024. Odor removal requests are up 46% from a year ago, according to Thumbtack data.

OUT: White

The maximalist, grandma-chic style will reign supreme in 2024, as more homeowners get louder with the colors and patterns they choose to decorate their home. Instead of all-white homes, Olsen predicts more tans and almonds, ushering back in the brown feel that took over the 2010s. On the other hand, some homeowners are ditching paint entirely—paint removal is up 60% compared to a year ago—and turning to other materials, like wooden accents, to switch up their home’s design.

Credit/Original Source: National Association of Realtors

Buyers have had it rough, but some experts think 2024 will see improvement in mortgage rates, home prices and availability of both new and existing homes for sale.

You feel demoralized about the housing market, right? Hold on. After a grim 2022 and 2023, it looks like 2024 is shaping up to be less hostile to home buyers.

Here’s a summary of what’s been rotten in the state of housing: Home prices skyrocketed from the middle of 2020 to mid-2022. Then, mortgage rates took off, and the 30-year fixed-rate home loan crested at almost 8% in October 2023. Home buyers struggled with affordability as high-interest rates eroded their borrowing power. They had few homes to choose from, anyway.

Meanwhile, rising rents made it harder to save up a down payment – or simply to find an affordable place to rent. The typical tenant’s annual rent went up 6% in 2022, and another 8% in 2023, after rising less than 4% each year in the previous 14 years.

It’s been a rough few years. But 2024 might see improvement in mortgage rates, home prices, and availability of both new and existing homes for sale. Buying a home won’t be easy in 2024, but it might be less frustrating than in 2022 and 2023.

Mortgage rates should keep falling

The most important development involves mortgage rates. They have improved since autumn. In January, the average rate on the 30-year fixed-rate mortgage was 6.64% in Freddie Mac’s weekly survey. That was down from October’s average of 7.62%.

That drop of nearly one percentage point makes a big difference in affordability: It would cut $198 off the monthly payment on a $300,000 loan.

If inflation finally cools off, as it’s expected to, forecasters believe mortgage rates will fall further. Fannie Mae and the Mortgage Bankers Association predict the 30-year mortgage will average somewhere around 6% in the fourth quarter of 2024, down from 7.3% at the end of 2023.

Consumers feel pretty optimistic about rates, too. In Fannie Mae’s latest monthly survey of consumers, 36% of respondents said they expect mortgage rates to fall over the next 12 months. That’s the highest proportion in the National Housing Survey’s history, going back to June 2010.

Home prices are rising more slowly

Home prices, unlike mortgage rates, probably won’t fall in 2024. But they won’t go up as fast as they did from August 2020 through June 2022, when prices rose a startling 33.3% in less than two years.

The price increases have already slowed down. In December 2023, the median resale price of an existing home was $382,600, according to the National Association of Realtors. That was only 4.4% higher than the same month a year earlier.

Even though price increases have tapped the brakes, home buyers are still struggling from those two years of accelerated prices.

“Because the country is still faced with affordability challenges, it’s really hard to see any force that would push home prices dramatically higher this year,” said Mike Simonsen, president of Altos Research, a real estate analytics firm, in a mid-January YouTube commentary.

Builders sell homes at lower price points

Another factor promises to prevent prices from running away: Home builders are diligently adding to the housing stock. They completed a little over a million single-family houses in 2023 and 450,000 multi-unit dwellings (everything from duplexes to high-rise apartments).

Construction is still going strong. Going into 2024, 1.65 million housing units were being built, and builders were breaking ground on more houses and fewer apartments.

The pace of construction helps buyers who want more homes to choose from. At the end of 2022, a total of 1.42 million new and existing homes were for sale. At the end of 2023, the number was 1.45 million. Not a ton of improvement, but at least the number of homes for sale is moving in favor of home buyers.

In another positive development, home builders have shifted to lower price points, according to the U.S. Census Bureau. The change happened quickly. In December 2022, 38% of newly built single-family houses cost less than $400,000. In December 2023, that portion had grown to 47%. We’re talking single-family houses, not condos.

But will sellers show up?

When you combine these trends – falling interest rates, moderation in house prices and vigorous home construction – it’s easy for an optimist to conclude that houses will become more affordable in 2024. The question is: Will homeowners continue to limit progress by keeping their homes off the resale market?

Of homeowners with mortgages, almost half have home loans with rates of 3.5% or lower, according to data compiled by the Urban Institute, an economic policy think tank. With mortgage rates well above 6% today, these homeowners have an incentive to stay where they are instead of selling, then swapping their low mortgage rates for higher rates on their next home. This phenomenon, known as rate lock-in, restricts the supply of homes available for sale, even as demand remains strong.

“By and large, inventory is still going to be pretty low as people are kind of staying in their homes,” says Lisa Sturtevant, chief economist for Bright MLS, a real estate database in the mid-Atlantic region. “And so prices, you know, will probably still go up in most places.”

She adds: “If you’re a buyer, I think it’s still going to be a tricky market, a tight market, particularly if you’re coming in as a first-time buyer.”

Yet there’s room for hope. Yes, people want to keep their low-rate mortgages. But people outgrow their homes, or feel the urge to downsize, or need to relocate, or just plain get sick and tired of where they’re living and long for new digs.

Simonsen, in a YouTube commentary on Feb. 12, pointed to an 18% jump in home listings in the first week of February compared with the previous week. “Each week, we can see more sellers testing the market. More buyers are finding their opportunities as well,” he said. The upshot is that the inventory of unsold homes keeps building. That gives buyers more selection to choose from and should limit the rise of prices.

Get ready to rumble

If this partly sunny outlook is accurate, the topmost advice when buying a house in 2024 is to prepare for competition when you make an offer on a home. Get preapproved for a mortgage, get ready to settle for a “good enough” place instead of a dream home, and if you lose a bidding war, brush yourself off and keep looking.

© 2024 WCMH, Nexstar Broadcasting, Inc. All rights reserved.

Credit/Original Source: FloridaRealtors.Org