5 Criteria for Pricing a Home

When you put your home up for sale, one of the best ways to determine the asking price is to look at comparable sales. There’s rarely a perfect apples-to-apples comparison, so a pricing decision often relies on comparisons to several recent sales in the area. Here are five criteria to look for in a sales comparison.

  1. Location: Homes in the same neighborhood typically follow the same market trends. Comparing your home to another in the same neighborhood is a good start, but comparing it to homes on the same street or block is even better.
  2. Date of sale: It varies by location, but housing markets can see a ton of fluctuation in a short time period. It‘s best to use the most recent sales data available.
  3. Home build: Look for homes with similar architectural styles, numbers of bathrooms and bedrooms, square footage, and other basics.
  4. Features and upgrades: Remodeled bathrooms and kitchens can raise a home’s price, and so can less flashy upgrades like a new roof or HVAC system. Be sure to look for similar bells and whistles.
  5. Sale types: Homes that are sold as short sales or foreclosures are often in distress or sold at a lower price than they’d receive from a more typical sale. These homes are not as useful for comparisons.

For more information or assistance, contact…

Jerry Henberger
Vice President, Luxury Homes and Commercial Investments DRE#01332379
Henberger Real Estate / REMAX Premier Realty
Toll Free: 855.963.0100   Cell/Direct: 949.874.7126
Jerry@Henberger.com

TAX REFORM PROPOSAL – California Association of Realtors (C.A.R.) Official Statement

LOS ANGELES (Sept. 27) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today issued the following statement in response to Republican leaders’ tax reform plan announced today:

California

“The tax reform proposed by the Republican leadership will eliminate the incentive for people to buy homes, shrink the middle class, and raise taxes on hundreds of thousands of California homeowners,” said C.A.R. President Geoff McIntosh. “The doubling of the standard deduction, coupled with the elimination of state and local tax deductions, such as property taxes, will adversely impact California and its housing market. The average California homebuyer could end up paying $3,000 more a year in taxes under today’s proposal.”

“Homeownership has and continues to be the best way for families to grow wealth and increase the middle class. Congress should look at ways to incentivize and increase homeownership rates, not increase taxes on families wanting to buy a home.”

“Any change that would make homebuying less attractive will be detrimental to the housing industry and the nation’s economy because of the 2.5 million private-sector jobs created by the industry in an average year,” said McIntosh.
Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

 

When is a good time to buy a home?

As students head back to school, families start to settle into their routines.  For many of us, home buying activities are not usually part of the family routine.  Plans to buy a home are often mistakenly put on the back burner until the spring. So why should you start your search for a new home now?
Deciding to buy a home is one of the most significant financial decisions we all make. While location is is usually the most important factor, timing may also have a big impact on how much you pay for a home.  According to home buying research, the best month for buyers is October. This means that if  you have been considering a home purchase, now is the time to start looking.  The best day of the week is Monday. And the single best day on the calendar is October 8th.
RealtyTrac reviewed over 32 million home and condo sales over the past 15 years, and they found that homes purchased in October came at a 2.6% discount to the current fair market value. Though based on the data, not many people were taking advantage of the discount, as only 2.7 million, or just 8.4%, of house closures occurred in October.
The discounts are most likely a function of there being fewer buyers, meaning sellers are more willing to settle on lower prices. These are significant numbers considering the price of a new home.
Sellers are often and mistakenly told to take their homes off the market until spring, On the flip side, real estate agents tell buyers that this can be a very opportune time for them because sellers, who keep their homes on the market through the holidays, are often very motivated to sell. There are also typically fewer buyers in the marketplace, so there is less competition for homes.   Following October as best months to buy were February, July, December and January — all fall or winter months except for July, which was a surprise given that conventional wisdom would suggest that is a good time to sell but not necessarily to buy at a bargain price,” said the report.
The worst month to buy a house was April, when purchases paid 1.2% more than the market value. It was also the only month that did not register some sort of discount.
Additionally, RealtyTrac broke down the days of the week. Monday was the best day to purchase a house, with closings on that day averaging a discount of 2.3%. Friday was the second-best with a 2% discount, and Tuesday was the worst with only a 1% discount.
So while the findings are exclusive of each other, closing on a Monday in October seems to be a pretty good bet.
Looking at the calendar, RealtyTrac found October 8 as the single best day to close, with an average discount of 10.8%. This was followed by  November 26 (10.1% discount), December 31(9.7% discount), October 22 (9.6% discount), and October 15 (9.1% discount).
The worst day of the year to purchase was January 19, with a 9.6% increase over market value. Home buyers also paid premiums over 9% on February 16 and April 20, both at 9.5%.
The most important first step in this process is to set up a meeting with your mortgage professional, negotiate a good pre-approval letter, then work with your real estate professional to find your new home.  Now is the time!  Picture yourself in your new home, call or text today  to begin your new home search!
Jerry Henberger, Broker and Vice President, REMAX Premier Realty – Direct line: (949)874-7126
Click here to find the value of your home:   Instant Custom Home Value

American Lifestyle Magazine – July 2017 Edition

Jerry Henberger
REALTOR® | CalBRE# 01332379

                                           

Summer Sophistication

Enjoy a taste of the outdoors with these tasty grilling recipes.

Get Recipes & Watch Video


The Legacy of the National Park Service

Get to know America’s national parks, and discover which one fits you best.

Read Article & Take Quiz


Urban Realism: James Randle

Take a visual journey down our country’s roads with this artist’s inspired works.

Read Article & Watch Video


Road Trip Guide

Use these tips to be prepared for any contingency when you hit the road.

Read Article & Download Printables



Please enjoy this edition with my compliments, and be sure to share it with your friends. Thank you!


OPEN MAGAZINE

Jerry Henberger
REALTOR® | CalBRE# 01332379
(949) 874-7126
Jerry@henberger.com

ReminderMedia
1100 First Avenue, Suite 200
King Of Prussia, PA 19406

©2017 ReminderMedia, All Rights Reserved.
unsubscribe from this list


Housing Demand – Orange County, August 16

As expected, the Orange County housing market slowed in July a bit, transitioning from the red hot Spring Market to the beginning of the Summer Market. It was as if housing downshifted a gear, from 5th to 4th; it was still cruising, just not as fast as the spring. August typically looks a lot like July, maybe increasing a smidgeon, but still slower than the peak of the real estate market, March through mid-June. This cyclical phenomenon is easily explained by logically looking at the timing of the year. There are plenty of summertime distractions, especially in Southern California, from splashing around in the waves to traveling on the annual family vacation. The distractions lead to less buyer activity and demand drops. That’s the typical, annual real estate cycle in Orange County. Spring is the busiest time of the year. Summer is the second busiest. Then, there is the Fall and Winter Markets, where demand continues to downshift until it drops to its lowest level of the year by the end of December.

OC Demand Aug 16

This year has been quite a bit different as demand increased by 5% in the past month. It feels like June, the tail end of the Spring Market, and not at all a typical summer. Demand, the number of new pending sales over the prior month, increased from 2,783 to 2,935 in the past month. Compare that to last year at this time when demand decreased by 2% from 2,810 to 2,762 (6% less than today’s level). Demand has not been this high since 2012 when it reached 3,544 pending sales; however, 17% were short sales that took a very long time to sell and often never closed. Today, only 1.2% of demand are short sales. Stripping short sales from demand, the last time it was this high dates all the way back to 2005, prior to the great recession.

Many may wonder why housing is so hot this summer. It took the market a while to get to this point. Housing has healed. Foreclosures and short sales are scary stories from the past, currently representing less than 3% of all closed sales. In 2012, they represented 31%. Now that housing has been restored and distressed properties are only an asterisk, the market has been blossoming. Throw in rock bottom interest rates, even lower than last year, and you have a recipe for strong demand. And, it does not look like interest rates are going anywhere fast. The Federal Reserve raised the short term rate for the first time in nine years back in December of last year. They hinted at four more hikes in 2016. So far, NOTHING. It doesn’t appear that there will be a change until December, if at all.

Low interest rates are only part of the reason for hot demand. This year, like every year since 2008, fewer homeowners are opting to sell. There are 30% fewer homes on the market compared to 2000 through 2007. People are staying in their homes a lot longer and are just not moving. On average, the current turnover rate for homeowners is 23 years. That’s a far cry from the days of lore, prior to the Great Recession, when homeowners moved much more frequently.

With a low supply of homes and strong demand, it’s no wonder that there’s a heat wave in housing.

JerryNewest    Sig BHHS COLORS-01

Orange County Housing Market Summary – August 2016

Orange County Housing Market Summary

  • Typically, the active inventory peaks in August, but this year it peaked in mid-July and has since dropped by 34 homes, now totaling 7,295. There are 128 more homes on the market compared to last year at this time.
  • There are 19% fewer homes on the market below $500,000 compared to last year at this time and demand is down by 9% as well. As home values continue to rise, this range is slowly disappearing.
  • Demand, the number of pending sales over the prior month, increased by 2% from 2,866 to 2,935 in the past two weeks. Demand was at 2,762 last year, 6% less than today. The average pending price is $790,569.
  • The average list price for all of Orange County is $1.4 million.
  • For homes priced below $750,000, the market is HOT with an expected market time of just 50 days. This range represents 45% of the active inventory and 67% of demand.
  • For homes priced between $750,000 and $1 million, the expected market time is 84 days, a slight seller’s market (between 60 and 90 days). A slight seller’s market is one with very little appreciation, but sellers still get to call more of the shots during negotiation. This range represents 19% of the active inventory and 17% of demand.
  • For luxury homes priced between $1 million to $1.5 million, the expected market time is at 114 days, decreasing by 6 days in the past couple of weeks. For homes priced between $1.5 million to $2 million, the expected market time dropped slightly from 162 days to 159 days. For luxury homes priced above $2 million, the expected market time dropped from 334 days to 304 days. The luxury end, all homes above $1 million, accounts for 36% of the inventory and only 16% of demand.
  • The expected market time for all homes in Orange County decreased from 77 to 75 days in the past couple of weeks, a slight seller’s market.
  • Distressed homes, both short sales and foreclosures combined, make up only 1.8% of all listings and 2.8% of demand. There are 45 foreclosures and 85 short sales available to purchase today, that’s 130 total distressed homes on the active market, dropping by 6 in the past two weeks.
  • There were 2,820 closed sales in July, a 9% drop from June and 13% fewer than last year’s 3,243 closings. The sales to list price ratio was 97.5%. Foreclosures accounted for 1% of all closed sales and short sales accounted for 1.7%. That means that 97.3% of all sales were good ol’ fashioned equity sellers.

JerryNewest  Sig BHHS COLORS-01

Summer 16 – A Cooling Orange County Real Estate Market

Here’s the scoop, the best time of the year to sell a home is in the rearview mirror, the Spring Market, March through mid-June. That’s the prime time to place a home in escrow in order to close now through mid-August. We hear about tons of closed sales that occurred in May, and, in a couple of weeks, reports of even more sales in June will prompt many to think that “right now” must be the best time to sell. Unfortunately, these are reports of closed sales, homes that have gone through the escrow process, a process that lasts, on average, about 45 days. This time period is devoted to inspections, appraisals, and the buyer’s investigation of all documentation and disclosures. There is a truck load of paperwork to go along with it and it all takes time to sift through.

Homes that close in July were negotiated and placed into escrow in May and June, during the spring. Homes that are negotiated today will not close until August, the end of the second best time of the year to sell, the Summer Market. Housing will then shift to the Autumn Market, mid-August through mid-November. Closed sales will slow from July to August, and will continue to slow each and every month during the autumn.

In order to close in August, sellers only have a few weeks to negotiate a contract and place their homes into escrow. Here’s the “catch 22,” buyers are becoming less flexible and are zeroing in on the Fair Market Value. This can be determined by carefully reviewing the most recent comparable pending and closed sales. This is NOT a time to stretch the asking price as buyers are less inclined to overpay for a home.

Why were buyers more willing to overpay in the Spring Market and not the Summer Market? The answer is simply less competition due to summer distractions. The distractions started a few weeks ago with the graduating class of 2016. With more sunshine and the kids out of school, bring on the family vacations, trips to the beach to play in the surf and sand, refreshing dips in the pool, picnics at the park, a day trip to the local mountains, not to mention the San Diego Zoo, LEGOLAND, Knott’s Berry Farm, Magic Mountain, Raging Waters, the Discovery Science Center, Disneyland, and California Adventure. For some, buying a home takes a back seat to family fun. Many will still purchase, but not at WARP SPEED like the Spring Market.

With less competition, the expected market time (the average time it takes to place a home on the market and into escrow) has increased considerably since the peak of spring, the very beginning of May. It has risen from 55 days to 74 days, adding an additional 19 days to the expected market time. From now through October, it will continue to grow longer and longer. At 74 days, Orange County housing is still a slight seller’s market, which is when sellers are able to call more of the shots during the negotiating process, but appreciation slows considerably. Housing is moving towards a balanced market, one that does not favor buyers or sellers, a market time of 90 to 120 days.

A Summer Approach for Sellers: when buyer traffic is down and market time is rising, now is not the time to overprice. Multiple offers can still be achieved, but pricing is absolutely fundamental in order to achieve success. Ignoring the fundamental shift in activity during the Summer Market will result in wasting valuable market time during the second best time of the year to sell. The housing market downshifts considerably more in September.

SummerA Summer Approach for Buyers: even with less competition, it is still a seller’s market. Buyers are NOT able to call the shots. Orange County housing is not even close to tipping the scales towards buyers. Instead, paying the Fair Market Value determined by recent market activity is key. In some price ranges and neighborhoods the local market may still be really hot. In those cases, pushing the envelope a bit in price may be the winning strategy to stomp out the competition.

Luxury End: Demand dropped by 19% in the past month for homes priced above $1 million.

The summer slowdown has been felt the most in the upper price ranges with demand dropping by 19% in just a month. The active inventory above a million increased by 8% in the past month as well. As a result, the expected market time has risen substantially.

For homes priced between $1 million to $1.5 million, the expected market time has risen from 102 days to 143 in the past month. For homes priced between $1.5 million to $2 million, the expected market time swelled from 137 days to 159 days. For homes priced above $2 million, the expected market time grew from 231 days to 322 days. For proper perspective, 322 days from today is the end of May 2017. That’s nearly a year!

Jerry Henberger

Vice President – Commercial Division and

JerryNewestLuxury Home Specialist

REMAX Prestige Properties

www.FindHomesinOC.com

(949)874-7126

Top 5 Strategies When Buying a House

 

JH Portrate Close upAnalyzing the market trends in real estate is just as important as your other investment tracking strategies.  I do my best to inform clients how to find and negotiate the best deal possible and market statistics play a big part.   Understanding can mean success or failure and will determine if you overpay for a property.

As an example, homes that are selling in an FHA range of loans – (ceilings of $625,000) represent 68% of the demand but only approximately 42% of the available homes for sale in this range. This means that the nicest homes in this price range will get multiple offers and will only last a few days before going into escrow. On the flip side, luxury homes priced over $1,500,000 represent only 4% of the demand but 22% of the inventory!

It is a sellers market for the lower priced homes and a buyers market in the luxury home market.

So what doe this mean for you?  Here are my top 5 recommendations to keep in mind when buying a home:

1.) Stay on top of the listings on a day to day basis.
Use speciality websites like HomesinSouthOrangeCounty.com or FindHomesinOC.com to track your searches. These are updated regularly rather than sites like Zillow or Redfin.

2.) Work with your broker or agent making sure they know what you want.
Often times agents learn about homes before they are ready to hit the MLS. You can possibly avoid the arduous process of open houses and multiple offers.

3.) Don’t think too long before visiting these homes. If you see something you like, go and see them right away with your agent.
I, like other agents will prioritize your needs if you have an active search plan in process involving your agent. I am always available to take calls in the evening and on week-ends.

4.) Make sure you have a team working for you.
Make sure you are ready during all stages of a purchase.  I strongly recommend a pre-approval qualification letter be put ready from your mortgage banker so when you find your home, your offer will be strong and stand out. Our team consists of a broker, a mortgage banker, a transaction coordinator, a title officer, an escrow officer, a property inspector, a handyman, a team of termite and repair professionals, a roofer and more. You will need all of these professionals before you move into your new home.

5.) Make sure you have a plan to address any special needs.
i.e. If you have a home that you need to sell, share that with your broker. Brokers like me are experts in helping you with transitional ownership. Selling your home and buying your home can put you in a disadvantage if you don’t have a plan in place.

Our next blog post will address transitional ownership. This will highlight both the journeys of rent-to-own as well as sell-and-then-buying a new home.

Call or email today to discuss your needs and to get a plan working for you! : jerry@henberger.com

JerrySigLogo

 

End of Spring, 2016

The window of opportunity to take advantage of the busiest time of the year for Orange County housing is closing. 2016 is flying by, and, before you know it, so will the Spring Market. For homeowners who want to sell and take advantage of the strongest buyer demand of the year, they better be on the market and priced to sell right now.

OC Demand 2016For sellers, this is not the time to stretch the asking price. It is common for sellers to get overly excited in pricing their homes during a hot seller’s market. Just because it is a hot seller’s market does not mean that buyers are willing to pay tens of thousands more than the most recent comparable or pending sale. Core Logic reported that last month’s median sales price of $645,000 matched the highest level ever in Orange County in June of 2007, but that does not mean that buyers are more inclined to overpay.

Sellers are emotionally tied to their homes and that typically leads to overpricing. It is recommended that they take an emotional step back and look at all of the comparable data objectively. What’s so bad about overpricing? Most activity occurs within the first couple of weeks of placing a home on the market. When a home does not generate offers within the first month in a hot real estate market, it typically means that the home’s price is not accurate. When homes adjust the asking price, it is after the deluge of buyer activity that has already taken place. It does not mean the home will not sell; it means that the buyer frenzy is missed and fewer offers are generated. Pricing a home accurately initially produces more offers and allows a home’s price to be bid up. Often homes are negotiated for at or above the full asking price. An accurate price allows a home to fetch the highest sales price possible.

The reason the Spring Market is the best time to sell boils down to a supply and demand issue. Demand is at its highest point during the spring and there is not enough supply. When supply is low and demand is high, the market favors the seller. The end of spring is around the corner and there are already signs of the market starting to shift. Demand is peaking right now and the active listing inventory is actually growing. The reason demand is not continuing to grow despite a low interest rate environment and so many buyers waiting on the sideline ready to pounce on new homes that hit the market is twofold: (1) many homes are not realistically priced and buyers will not stretch to unreasonable heights; (2) graduations mark the beginning of all of the summer distractions, sidelining many buyers as they celebrate the successes of family and friends that graduate.

There is a cyclical downshift in buyer demand during the Summer Market. Summer is filled with distractions. That’s when the kids are out of school. Sand castles at the beach, a refreshing dip at the local pool, a picnic at the park, a trip to Disneyland, hiking in the local mountains, Southern California is overflowing with summer activities, distracting buyers from focusing 100% of their efforts on purchasing like they are able to in the spring. As a result, the active listing inventory increases, the supply of homes, and demand drops. When supply increases and demand decreases, the market cools.

Every year the Orange County housing market experiences a noticeable downshift and this year will not be an exception.

JH Portrate Close upJerry Henberger

Vice President, Commercial Division &

Luxury Home Specialist

REMAX Prestige Properties

949-874-7126