Why Access Is So Important When Selling Your House
If you’re gearing up to sell your house this spring, one of the early conversations you’ll have with your agent is about how much access you want to give buyers. And you may not realize just how important it is to make your house easy to tour.Spring is the peak homebuying season, so opening up your house to as many showings as possible can really help you capitalize on all the extra buyer activity we see at this time of year.Since buyer competition ramps up in the spring, buyers are going to want to move fast to see your house once they find your listing. And, if they see it and fall in love with it at a time they know they’re competing with other buyers, you may be more likely to get the offer you’re looking for on your home.It’s understandable you want to keep the disruptions to your own schedule to a minimum, and you may be stressed about having to keep it clean, but it’s worth it. As an article from Investopedia explains:“If someone wants to view your house, you need to accommodate them, even if it inconveniences you. Clean and tidy the house before every single visit. A buyer won’t know or care if your house was clean last week. It’s a lot of work, but stay focused on the prize.”To figure out what’s best for you, your agent will walk you through options like the ones below. This list breaks things down, starting with what’s most convenient for buyers and getting less buyer-focused as the list goes on:Lockbox on the Door – A key is available via a lockbox, which makes it easy for agents to show the home to potential buyers. This gives the most flexibility because the key is on-site and convenient.Providing a Key to the Home – An agent would have to stop by an office to pick up the key with this option. This is still pretty convenient for showings, but not quite as simple.Open Access with a Phone Call – You allow a showing with just a phone call’s notice, which can be great for someone who sees your house while driving by.By Appointment Only – This gives you a more advanced warning so you can get the house tidied up and be sure you have somewhere else you can go in the meantime. But it’s also a bit more restrictive.Limited Access – You might go this route if you only want to have your house available on specific days or at certain times of day. But realize this is the most difficult and least flexible of the choices.As an article from U.S. News Real Estate says:“Buyers like to see homes on their schedule, which often means evenings and weekends. Plus, they want to be able to tour a home soon after they find it online, especially if they're competing with other buyers. If your home can be shown with little or no notice, more prospective buyers will see it. If you require 24 hours’ notice, they may choose to skip your home altogether.” Your agent is going to help you find the right path forward based on your schedule and what’s working for other sellers in your area. And if you’ve got a hardline on granting buyers more access or have interested out of town buyers that just can’t be there in person, your agent will get creative and help you explore other options like video tours, virtual showings, and more.Bottom LineWhen it comes to selling your house, you want to be sure to get as much buyer activity as you can. Connect with a local real estate agent to talk about which level of access helps make that possible.
Why There Won’t Be a Recession That Tanks the Housing Market
There’s been a lot of recession talk over the past couple of years. And that may leave you worried we’re headed for a repeat of what we saw back in 2008. Here’s a look at the latest expert projections to show you why that isn’t going to happen. According to Jacob Channel, Senior Economist at LendingTree, the economy’s pretty strong:“At least right now, the fundamentals of the economy, despite some hiccups, are doing pretty good. While things are far from perfect, the economy is probably doing better than people want to give it credit for.”That might be why a recent survey from the Wall Street Journal shows only 39% of economists think there’ll be a recession in the next year. That’s way down from 61% projecting a recession just one year ago (see graph below):Most experts believe there won’t be a recession in the next 12 months. One reason why is the current unemployment rate. Let’s compare where we are now with historical data from Macrotrends, the Bureau of Labor Statistics (BLS), and Trading Economics. When we do, it’s clear the unemployment rate today is still very low (see graph below): The orange bar shows the average unemployment rate since 1948 is about 5.7%. The red bar shows that right after the financial crisis in 2008, when the housing market crashed, the unemployment rate was up to 8.3%. Both of those numbers are much larger than the unemployment rate this January (shown in blue).But will the unemployment rate go up? To answer that, look at the graph below. It uses data from that same Wall Street Journal survey to show what the experts are projecting for unemployment over the next three years compared to the long-term average (see graph below): As you can see, economists don’t expect the unemployment rate to even come close to the long-term average over the next three years – much less the 8.3% we saw when the market last crashed. Still, if these projections are correct, there will be people who lose their jobs next year. Anytime someone’s out of work, that’s a tough situation, not just for the individual, but also for their friends and loved ones. But the big question is: will enough people lose their jobs to create a flood of foreclosures that could crash the housing market?Looking ahead, projections show the unemployment rate will likely stay below the 75-year average. That means you shouldn't expect a wave of foreclosures that would impact the housing market in a big way.Bottom LineMost experts now think we won't have a recession in the next year. They also don't expect a big jump in the unemployment rate. That means you don’t need to fear a flood of foreclosures that would cause the housing market to crash.
Why We Aren't Headed for a Housing Crash
If you’re holding out hope that the housing market is going to crash and bring home prices back down, here’s a look at what the data shows. And spoiler alert: that’s not in the cards. Instead, experts say home prices are going to keep going up.Today’s market is very different than it was before the housing crash in 2008. Here’s why.It’s Harder To Get a Loan Now – and That’s Actually a Good ThingIt was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one.Things are different today. Homebuyers face increasingly higher standards from mortgage companies. The graph below uses data from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is:The peak in the graph shows that, back then, lending standards weren’t as strict as they are now. That means lending institutions took on much greater risk in both the person and the mortgage products offered around the crash. That led to mass defaults and a flood of foreclosures coming onto the market.There Are Far Fewer Homes for Sale Today, so Prices Won’t CrashBecause there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), that caused home prices to fall dramatically. But today, there’s an inventory shortage – not a surplus.The graph below uses data from the National Association of Realtors (NAR) and the Federal Reserve to show how the months’ supply of homes available now (shown in blue) compares to the crash (shown in red):Today, unsold inventory sits at just a 3.0-months’ supply. That’s compared to the peak of 10.4 month’s supply back in 2008. That means there’s nowhere near enough inventory on the market for home prices to come crashing down like they did back then.People Are Not Using Their Homes as ATMs Like They Did in the Early 2000sBack in the lead up to the housing crash, many homeowners were borrowing against the equity in their homes to finance new cars, boats, and vacations. So, when prices started to fall, as inventory rose too high, many of those homeowners found themselves underwater.But today, homeowners are a lot more cautious. Even though prices have skyrocketed in the past few years, homeowners aren’t tapping into their equity the way they did back then.Black Knight reports that tappable equity (the amount of equity available for homeowners to access before hitting a maximum 80% loan-to-value ratio, or LTV) has actually reached an all-time high: That means, as a whole, homeowners have more equity available than ever before. And that’s great. Homeowners are in a much stronger position today than in the early 2000s. That same report from Black Knight goes on to explain:“Only 1.1% of mortgage holders (582K) ended the year underwater, down from 1.5% (807K) at this time last year.”And since homeowners are on more solid footing today, they’ll have options to avoid foreclosure. That limits the number of distressed properties coming onto the market. And without a flood of inventory, prices won’t come tumbling down. Bottom LineWhile you may be hoping for something that brings prices down, that’s not what the data tells us is going to happen. The most current research clearly shows that today’s market is nothing like it was last time.
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