Americans Bullish on Buying, Selling – NAR Study

Americans are confident in the housing market and their ability to buy or sell successfully, according to the National Association of REALTORS® recently reported, 2019 fourth quarter survey.  74% of Americans felt optimistic regarding selling, while 63% were confident in home-buying.  According to the report, 73% of the Silent Generation (WWII) and 70% of younger boomers are most likely to think now is a good time to buy a home.  82% of those who earn $100,000 or more and own their home are most likely to think that now is a good time to sell a home.

64% of Americans believe home prices rose in 2019, NAR’s research shows. When asked their outlook on prices, 48% believe they will increase in the next six months, while 41% believe they will remain unchanged.

According to NAR’s newest research, 52% of Americans believe the economy is positively progressing. Lawrence Yun, chief economist at NAR, feels that economic gains have lifted positive sentiment. In December, the Labor reported that the economy generated 145,000 jobs and earnings rose 2.9% in 2019.  Affordability has improved, additional NAR research reveals.

“The mobility rate has been very low as many have opted to stay put for longer,” says Yun. “However, this latest boost—Americans saying now is a good time to move—is good news. With mortgage rates low, the timing is indeed ideal for those who want to enter into homeownership and for those looking to move on to their next home.”

At the start of the year, the average 30-year fixed mortgage rate sank to 3.64%, according to Freddie Mac.

            Same message as last week – take advantage of the timing and put your home on the market sooner rather than later. Same goes for buyers. Call us 631 765 5333!

Sources: National Association of Realtors, HOME Survey – Housing Opportunities and Market Experience, January 2020.  RISMedia, Suzanne De Vita, January 14, 2020.

Good News: Case-Shiller Study Shows Home Prices Passing 2006 Peak

The latest S&P CoreLogic/Case-Shiller Indices reported that October home prices rose 3.3% year-over-year, reaching a milestone 15%  above the pre-financial crisis peak reached July 2006.

Craig J. Lazzara, of the S&P Dow Jones Indices, said in a statement, “After a long period of decelerating price increases, the national, 10-city and 20-city composites all rose at a modestly faster rate in October compared to September. However, it is, of course, still too soon to say whether this marks an end to the deceleration or is merely a pause in the longer-term trend.

Heading into 2020, appreciation could temper, according to Lawrence Yun, chief economist at the National Association of REALTORS®, if builders expand inventory options. “Demand remains strong and supply is lacking,” says Yun. “Moreover, faster price appreciation in warmer Southern states reflect the ongoing migratory trend of people moving out of expensive regions of the country to more affordable parts. Southern cities should once again do better than most other markets.”

Additionally, although buyers face increasing prices, they also benefit from rising values, Bill Banfield, executive vice president of Capital Markets at Quicken Loans, points out.

The October, Year-Over-Year data for the 20 markets measured by S&P are:

Atlanta, Ga +4.2%, Boston, Mass. +3.4%, Charlotte, N.C. +4.8%, Chicago, Ill. +0.5%, Cleveland, Ohio +3.3%, Dallas, Texas +2.9%, Denver, Colo.+3.3%, Detroit, Mich. +3.1%, Las Vegas, Nev. +2.3%, Los Angeles, Calif. +2%, Miami, Fla. +3.3%, Minneapolis, Minn. +4.2%, New York, N.Y. +0.8%, Phoenix, Ariz.
+5.8%, Portland, Ore. +2.7%, San Diego, Calif. +2.9%, San Francisco, Calif. -0.4%, Seattle, Wash. +2.5%,
Tampa, Fla. +4.9%, Washington, D.C. +3%.

Although the stability was broad-based, New York was at the low end of the price increase year-over-year, and has had the lowest overall recovery rate (29%) from the 2008 crash of all the 20-city composites studied by Case-Shiller. This would suggest the New York composite, which includes NYC, Long Island, parts of New Jersey and Connecticut, has further to go and/or other factors like 2018 federal tax reforms, with significantly reduced certain state and local deductions may be holding down appreciation.  

Taking a microeconomic look at the North Fork Market, we have seen an increase in activity in recent months and believe our market reflects the pricing improvement. We also believe it will continue for the better part of 2020.  My advice: Sellers – call us and list early; Buyers - take advantage of the mild weather and low mortgage rates and shop early!

Source: RISMedia, Prices Now 15 Percent Higher Than Last Peak, December 31, 2019; Seeking Alpha, Updated S&P Case Shiller Home Price Data, Bespoke Investment Group, January. 8, 2020.

REAL ESTATE ECONOMISTS SAY 2020 IS A GO!

News about the economy has moved from concern over the health of the market in 2020 to optimism. Economists point to job growth, low unemployment and a good real estate market - for now. An undercurrent of concern that another recession is imminent, however, may be keeping consumer confidence low, and as a result, the National Association of REALTORS® (NAR) conducted  its first-ever Real Estate Forecast Summit in December, featuring the insights and market forecasts of 16 economists.

          While all the Economists had varying opinions about the state of the market, and where we are headed, the biggest takeaway is that chances of another recession in the short-term are low, tallied at an average 29% chance by the economists. Here’s what the economists had to say:

Current Market Analysis:

         “We are in a great economy,” said Lawrence Yun, PhD, NAR’s chief economist, “there is consistent job creation, leading to a super low unemployment rate of 3.6% in the U.S. The stock market is touching an all-time high, and homeowners have been accumulating wealth thanks to price appreciation.

         “But there are segments of the population that are not participating in this wealth gain. We have more people, affordability conditions are better, yet home sales are actually lower, so something is not matching up with the current environment.”

Future Market Predictions:

• Mortgage rates will rise incrementally, possibly hitting 4% in 2021—still favorable        according to historical conditions.
• Slight weakening in home sales, similar to 2019, driven more by lack of supply than lack of demand.
•  Slower price appreciation that is more manageable and more closely in line with income growth.
•  60,000 more housing starts in 2021.
•  Rents expected to rise a little faster than home prices.

         Those economists who were less optimistic felt that if we did go into a recession, it would be a much shallower recession. Overall, predictions for the future were relatively optimistic, with concerns over a recession low—a one in three chance.

         Here’s our takeaway for North Fork homeowners and buyers. If you are planning to sell, get into the market early - don’t wait for Spring.  If you are planning to buy a home on the North Fork, buy sooner rather than later – prices will continue to go up and mortgage rates will increase.  Call us now to list your home or buy a home.  We’re available - no winter in Florida for us, we’re here on the North Fork to serve you!

Source: NAR Forecast Summit: Is a Recession Imminent? Industry Economists Share Predictions, Liz Domingues, Associate Content Editor, RISMedia, December 25, 2019.

A Special Message for the Holidays!

 As we celebrate the holidays this year, let’s take time to appreciate and be grateful

for every day and all the blessings in our lives. May this verse inspire you to

engage in the “dance” of life and live each day to the fullest!

We hope you never lose your sense of wonder,
May you get your fill to eat but never lose that hunger.
May you never take a single breath for granted,

May love never leave you empty-handed.
We hope you still feel small when you stand beside the ocean,
Whenever one door closes, may another open.
Please give faith a fighting chance,
And when you get the choice to sit it out or dance…
We hope you dance! We truly hope you dance!
We hope you never fear those mountains in the distance,
Never settle for the path of least resistance.
Living may mean taking chances, but they’re worth taking.
Loving might be a mistake, but it’s worth making.
Don’t let some hell-bent heart ever leave you bitter
When you come close to selling out – please reconsider.
Give the heavens above more than just a passing glance,
And when you get the choice to sit it out or dance…
We hope you dance! We truly hope you dance!

Adapted from Lee Ann Womack’s, “I Hope You Dance”

All of us at Beninati Associates wish you a Blessed
and Merry Christmas, Happy Hanukkah and a very
Happy New Year!

SELLING A HOME HAS ITS CHALLENGES

We’ve all heard of “buyer’s remorse,” but have you heard of “seller’s tears”?

More than a third of people who’ve sold their homes say they have shed tears over the experience.

A recent study of consumers’ ranked selling their properties as one of their most stressful life events—along with getting fired or planning a big wedding.

36% of sellers interviewed, admitted sobbing over the experience. One in five of the people surveyed said they cried five times or more while going through the process of selling their property.

 “If you’ve ever sold a home before, you know how daunting the process can be,” Zillow’s Jeremy Wacksman said in the report. “Anticipating that stress can be a huge obstacle that keeps homeowners from moving on to the next stage of their lives. Our survey found more Americans were stressed over selling their home than planning a wedding, getting fired or becoming a parent.”

What is this all about? Homeowners say that uncertainty about their home’s sale price, worries that the property wouldn’t sell and pressure to fix up the homes triggered the tears.  Neighbors, friends and relatives, trying to be “helpful” by giving advice, often only serves to add more stress to the situation.

Even though home prices in most neighborhoods have more than recovered from the 2008 crash, some sellers have high expectations, and when the market doesn’t seem to agree, and their real estate agent suggests a price adjustment, it becomes a source of consternation.

Since 60% of the folks Zillow talked to were also buying another property, buyer jitters added more stress to the already complex situation.

The important takeaway is to recognize that selling or buying a home is probably one of the largest financial transactions in most peoples’ lives – be prepared - it will be stressful.  Seller should avoid taking advice from well-meaning people who are not experts, and who are not familiar with their situation, and instead trust their professional advisors, stay focused and know that in time, all will be resolved.

Source:RISMedia,”Nothing to Cry About: More Than a Third of Home Sellers Get Weepy Over the Deal,” Steve Brown, 2019 The Dallas Morning News, Distributed by Tribune Content Agency, LLC

A LOOK AT SOME REAL ESTATE TRENDS FOR 2020

It’s always healthy to look forward, especially this time of year, and consider how our lives may be affected in the new year.  This article by experts at Boom Town Networks, Inc.  Is thought provoking and worthy of consideration.  Here are some key trends that they believe will impact the next two years and beyond:

Generational Shifts: “Silver Tsunami” & Welcome Gen Z
              As millions of aging Americans enter their 60s and 70s, there is potential for a variety of impacts on the housing market in the coming years. Senior housing demands often mean downsizing and cost saving, so the market could see higher demand for smaller, more affordable inventory. Because inventory of these smaller one-level homes is limited across the board in the U.S., competition could increase.

            It’s also time to say hello to Generation Z. According to a TransUnion report, the number of Gen Z shoppers who took out a mortgage more than doubled in one year. Year-over-year growth was 112% in comparison to 12% from millennials. It’s important to consider what the profile of a Gen Z homebuyer looks like. Similar to millennials, they are riddled with student debt. That means smaller spaces and affordability are key. In combination with the millennial market and the Silver Tsunami, it’s easy to see why experts are predicting more of a demand for affordable inventory that is both senior- and starter home-friendly.

Recession: Facts and Fears
            Some experts predict that a recession will hit the U.S. economy around 2020-2021; however, this time around, the housing market is not the cause, as low unemployment , stricter Fed lending policy and steady/increased housing prices,  moving towards a more balanced market. The most optimistic predictions lean towards a smooth descent into a balanced market, rather than a crash.

            However, it’s important to be cautiously optimistic, but prepared. Recession fears, warranted or not, could lead to seller hesitation and exacerbate an already low-inventory market, with first-time buyers wanting to snap up good deals, but sellers wanting to wait until prices rise.

Return of the Suburb
            Census data is showing that the “back to the city” trend of the early 2010s is shifting. City population growth has declined while suburban growth has increased, mainly due to millennials.  Because millennials are now having children, the rise of suburbia makes sense. They want the stability and affordability of what the suburbs offer; however, they still want some of the city-like amenities they’ve grown accustomed to. And so, the term “hipsturbia” was born. Essentially, it means “cool” suburban communities that are more walkable, accessible and fun. We’re seeing the trend grow in smaller communities outside of New York City, Los Angeles and San Francisco…and the NORTH FORK (my editorial addition!)

These trends, along with growing technological sophistication, are important to consider, especially if you are thinking about selling or buying a home on the North Fork.  If you want to explore the ramifications for you personally, I would be happy to meet with you and discuss how these trends may impact your real estate strategy in the next few years.  Call me – and let’s talk.

Source: RISmedia, “5 Real Estate Trends to Watch in 2020.” November 28, 2019.

THANKSGIVING – A TIME TO BE GRATEFUL

          Thanksgiving is one of America’s most cherished holidays of the year where family and friends gather and give thanks.  The tradition dates back to 1621, when the Plymouth colonists shared a harvest feast with Native Americans. The Wampanoag tribe came bearing much of the food and like most Native American tribes had their own long-standing tradition of harvest celebrations. In fact, there was so much food that the revelry lasted for three days!  So, sitting down to a big plate of yet more leftovers on the Saturday after Turkey Day isn't overkill, it's tradition!

           

            The generous Wampanoag’s taught the colonists where to fish, where to hunt and how to plant corn. It’s likely that venison, wild fowl – roasted duck or goose, seafood - lobster, clams and mussels, dried corn, porridge and simple cranberries, chestnuts and walnuts were on the first Thanksgiving menu. Probably not turkey, potatoes, corn or pumpkin pie!             

In 1863, in the midst of the Civil War, President Abraham Lincoln proclaimed a National Thanksgiving Day, to be held on the fourth Thursday of each November. That’s why this year’s Thanksgiving is so late. 

            Living on the North Fork, we have a great deal to be thankful for. We are especially blessed to be in this wonderful part of our country.  More than ever we need to foster understanding, kindness and civility.

            May this year’s Thanksgiving serve as a time of gratitude for all our blessings and may we each, in our own way, share our abundance.

           

            All of us at Beninati Associates wish all of you, God’s Blessings and a very Happy Thanksgiving Holiday.